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UK Export Finance signs up to net-zero 2050 target

Image credit: DT

UKEF, the UK’s Export Credit Agency, has announced its plan to reach net-zero carbon emissions by 2050, decarbonising its financial portfolio while increasing support for sustainable exports.

The pledge to reach carbon neutrality is the centrepiece of its 2021-24 climate change strategy, launched today (22 September) just weeks ahead of the UK’s presidency at Cop26, to be held in Glasgow. It coincides with a speech made by the Prime Minister Boris Johnson to the UN General Assembly, putting forward the case that climate mitigation and economic growth are not mutually exclusive but vital for each other’s success.

UKEF has a capacity of £50bn to support UK exports through loans, insurance and guarantees; last year, it issued £12.3bn to businesses in financial support. In line with its new target, its capacity must reach carbon neutrality by 2050.

Its climate change strategy has five elements: it aims to increase support for green exports; reduce greenhouse gas emissions from its financial portfolio; improve understanding and mitigation of its climate-related financial risks; report against climate-related commitments, enhancing transparency and disclosure, and encourage others to follow in setting climate targets.

“This plan is among the most ambitious of any Export Credit Agency worldwide,” said Anne-Marie Trevelyan, the new international trade secretary. “It puts UKEF squarely in support of green exports to tackle climate change, level up the country and help us recover from the pandemic.

“UKEF’s net zero pledge shows the UK’s climate leadership and is an encouragement for other countries to follow suit. Its world-leading financial products help British businesses capture billions of pounds worth of foreign deals, boost green exports and give hope that temperatures can be kept in check.”

It will publish more detail on emissions from its most carbon-intensive projects over the next four years, while also establishing new climate change stress-testing and boosting financing for green projects. A second climate change strategy is due in 2025.

Dr Ben Caldecott, a member of the UKEF Export Guarantees Advisory Council, commented: “Climate change itself and societal efforts to tackle climate change are creating structural changes in almost every sector of the global economy. This strategy is an important step for UKEF and sets out how it will systematically mitigate climate-related risks and take advantage of new opportunities.

“UKEF will increasingly incentivise businesses in need of export finance to align with the Paris Agreement and will help to open new frontiers for UK companies seeking to expand green exports.”

Dr Nina Skorupska, CEO of the Association for Renewable Energy & Clean Technology, said: “[The association is] very pleased to see the government take a sustainability-first approach to global trade deals and emphasise the opportunities to the UK from green economy exports.

“We urge UK companies to take advantage of this support and consider exporting or international growth opportunities in the net zero sector, as we know that renewables and clean technology can deliver great outcomes for this country and globally, from lowering emissions to improving air quality and saving people and companies money.”

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