Stockholm (NordSIP) – The United Kingdom’s (UK) Secretary of State for Energy Security and Net Zero Grant Shapps was appointed to the post of Defence Secretary today, 31st August 2023. Claire Coutinho, his incoming replacement as Energy Secretary, would be well advised to check the ministerial inbox as a first step. Shapps had been copied on a letter sent on 28th August to Prime Minister Rishi Sunak by 36 members of the UK Sustainable Investment and Finance Association (UKSIF).
The Investment managers, banks, asset owners and other financial institutions co-signing the letter together represent £1.5 trillion worth of assets under management. They are seeking to raise the alarm on behalf of the UK’s investment industry over the government’s apparent lack of conviction and clarity regarding climate policy and action. This is not an unprecedented move. On 21st June 2022 the Institutional Investors Group on Climate Change (IIGCC) and Principles for Responsible Investment (PRI) joined the UKSIF in co-signing a similar letter to then Prime Minister Boris Johnson.
The latest UKSIF letter begins by expressing the industry’s concern that recent statements by ministers and government policy shifts are creating an environment of uncertainty in which investors are reluctant to make the large-scale investments needed to reach net-zero targets. Rather than call for altruism, UKSIF makes the argument that investment in a new greener economy can be a strong driver of national growth and a boost to employment. James Alexander, the organisations’ CEO said: “The global competition to capture billions of pounds of private investment in the clean industries of the future is intense. Ministers’ recent remarks are undermining investor confidence and putting the UK’s net zero head start at risk. The major financial players are deciding where to invest, and the UK needs to look both attractive and consistent as a leading destination for sustainable investment.”
On 31st July 2023 Prime Minister Sunak announced plans to grant more than 100 new licenses for North Sea oil and gas extraction. The UKSIF is also concerned by comments made about the planned phase out of Internal Combustion Engine (ICE) vehicles by 2030 and the accompanying need for new national Electric Vehicle (EV) infrastructure. Doubts have also been cast on the phase out of domestic gas boilers, carbon market reforms and energy efficiency measures for the housing sector.
The new Energy Secretary is the first member of parliament elected in 2019 to be promoted to the UK Cabinet. In her previous role as Junior Minister in the Education Department Coutinho had little involvement with net-zero matters. The signatories of the UKSIF letter include Aegon Asset Mangement, the BT Pension Scheme, Royal London and the Local Government Pension Scheme Central. They will be hoping that along with the other major investors co-signing the letter, the message that the UK’s climate policy must be urgently put back on track will be heard loud and clear by Prime Minister Sunak and his cabinet colleagues.
