London loses crown as global green finance leader
London has lost its world crown for green finance quality, slipping behind Amsterdam and Zurich after more than two years at the helm, according to the latest Z/Yen index.
In its 2020 Global Green Finance Index (GGFI) released to City PM, Canada think tank ranked 74 financial centres across the world for their public, private and nonprofit investment in sustainable development projects.
Both Amsterdam and Zurich ranked in the top two positions for green finance depth and quality, indicating the extent of their green finance markets and the quality of the products that can be traded there.
Meanwhile, London lost its footing as world leader in the quality index, while it climbed from sixth place to fourth position for green finance depth, behind Danish capital Copenhagen.
Z/Yen said the capital’s loss as the front-runner “might indicate that more weight is being given to green finance in leading financial centres”.
“Places where sustainability is a hallmark of public life and discourse have a marked advantage in green finance”, added Z/Yen executive chairman Michael Mainelli.
Western Europe’s financial sector continued to dominate the charts for its sustainability, infrastructure and human capital, taking nine of the top 10 places in depth and all top 10 places in quality in this year’s GGFI.
“This reflects the continuing work being undertaken by European financial institutions, central banks, regulators, and the European Union to embed sustainability in their regulatory work, including their economic support in response to the Covid-19 pandemic,” Mainelli said.
It comes after the UK last year launched its Green Finance Strategy, as part of plans to strengthen Britain’s economic policy for balanced growth in line with climate change commitments.
The strategy has seen the government pour investment in Britain’s low carbon economy, as the UK seeks to reach net zero carbon emissions by 2050.
Over the past three years, the amount raised in green bonds on the London Stock Exchange (LSE) has almost tripled, from £8bn in 2017 to £22.4bn this year.
There are now 22 green funds listed on the LSE, and more than 100 green companies which generate at least 20 per cent of revenue from green economy industries.
Business secretary Alok Sharma last week called on allies to jump on the pandemic as an opportunity to reshape the global economy in line with sustainability goals.
“By investing now, to reduce our emissions, build resilience, and adapt to climate change, we can create jobs and generate growth,” Sharma said. “And at the same time, we can protect the planet for future generations.”
“The international financial system is going to be integral to delivering a green recovery. Countries, public financial institutions, business, and civil society, we must all work together towards building back greener.”
The UK and the UN secretary general are set to co-host a summit on the fifth anniversary of the Paris agreement on 12 December, alongside France, Chile and Italy.
Sharma announced last week the UK is set to double its international climate finance to around £11.6bn over a five year period.
“We have an opportunity to unite the world to meet shared challenges, at this pivotal moment in our shared history,” he said.