Helping Britain on its journey to a green future

With COP26 on the horizon and its promise of a clear pathway to net zero, I wanted to take a moment to reflect on one of the government’s key aims for the conference, to “get finance flowing to climate action, both public finance and private finance”. Lloyds Banking Group, as the UK’s largest financial services group, knows it can make a real difference in financing a green future – a future which will require finance. Unlike the Digital Revolution which changed the economy while relying on relatively limited capital, the transition to a green economy will require:

• Significant investment as we build new infrastructure, such as new green housing stock or retrofitted greener housing
• New technology, as the UK will need a need an electric vehicle fleet
• Investment in renewable energy sources to transition away from fossil fuels

So if finance is so vital to the future of the UK’s green economy, then the question is, what are we doing about it? My team and I believe that an ambitious project requires an ambitious target, which is why the Group is working with customers, government, and the market to help reduce the carbon emissions we finance by more than 50% by 2030 on the path to net zero by 2050. If we were to translate that into a more visual example, this cut would be the equivalent of removing the emissions produced by nearly a quarter of UK homes – massive! We’re also taking active steps to invest in the transition, by providing over £2.3bn of green finance through Lloyds Banking Group’s Commercial Real Estate Green Lending Initiative, Renewable Energy Financing and Green Bond facilitation.

As the Group and other financial institutions make these investments, we will also see a Green Multiplier Effect, which in short means that by providing finance for companies to produce, or invest in greener products, as well as finance for consumers to make purchases which benefit both them and the environment, this virtuous cycle will increase the supply and demand for green products, ultimately leading to more economic activity, more green jobs and greater prosperity for Britain. This is our vision for the impact that we as a business can make in the Green Economy.

The need for this renewed prosperity is more urgent than ever as the UK recovers from the pandemic. As we look to rebuild our economy, we must pose the question: what kind of economy do we want? I count myself as one of many who would like to invest in a world where our children and our grandchildren can prosper and enjoy the environment they live in. A green economy can support the UK’s recovery, promote long-term prosperity and help our planet become more sustainable. Together, UK businesses have the chance to power this transformation. Alongside a number of other initiatives, we have expanded the funding available under our green financing to £5bn to support businesses in this transition and we have committed to plant a million trees a year for the next ten years as part of an initiative with the Woodland Trust.

This is not a journey that we or any business can embark on alone. We will need to collaborate with our customers, with the finance industry and with government to make the most of the huge opportunity that a green recovery presents to us all.

If you’d like to learn more about Lloyds Banking Group’s work on the green economy, our website has some really helpful guidance, as well as interesting data about how we’re financing a green future: https://www.lloydsbankinggroup.com/who-we-are/responsible-business/financing-a-green-future.html