The UK’s Green Finance Strategy, published in July 2019, had three objectives: helping the financial sector align with net-zero; mobilising private investment that supports sustainable growth; and ensuring businesses can benefit from the transition to net-zero. The government has now issued a Call for Evidence to support its 2022 Green Finance Strategy update, and Glasgow City Council offer some interesting suggestions that relate to sustainability in the built environment.
One recurring theme was that of barriers to implementing successful green investment. Clear definitions and criteria for what is eligible for green finance are lacking, risking confusion or, worse, greenwashing. Further confusion arises from differences in metrics and taxonomies between the public and private sectors, hindering the measurability of progress, as does the misalignment in timings of commitments between the UK as a whole and the devolved nations. Developers and housing associations require clarity to be confident their projects will receive green investment, and need a standardised way to report their progress in terms of environmental sustainability.
The need for standardisation in sustainability reporting was a second point that was reiterated throughout the response. Attracting green finance flows requires clear and robust reporting, but carbon and sustainability datasets are often of varying quality and in a variety of formats. Scope 3 emissions are notoriously difficult to capture but are becoming particularly important as Scope 1 and 2 reporting has become more familiar. This is an issue that SHIFT Environment are aware of and have actively addressed with a standardised reporting format for housing associations across the country.
Finally, science-based targets and measurable outcomes were suggested as a prerequisite for receiving ‘transition’ finance – that which supports the decarbonisation of high-emitting organisations. With the built environment contributing 25% of the UK’s greenhouse gas emissions, SMART targets can help housing associations and developers work towards their sustainability goals, and may now shore up their chances of securing green finance as measurable outcomes can allow the success of green investment to be assessed.
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