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UK Country Report
Global Hub, Local Dynamics: Mapping the Transition to a Sustainable Financial System

Country Paper

Authors: Jeremy McDaniels    Nick Robins   

Published By: UNEP Inquiry   

Date: Jan 2016

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UK Country Report

This paper looks at the steps that the UK has taken towards a sustainable financial system shaped by its role as a global financial centre and a distinctive dynamic between social entrepreneurs and civil society organisations, market innovation and policy frameworks.The City of London is not only home to some of the world’s largest financial markets, but also to a range of sustainable finance initiatives that are setting the agenda both domestically and internationally.

Following the financial crisis there has been a shift in the way in which sustainability is being pursued, moving from institutional to a systemic approach. Looking across the system, five key avenues of change within the UK can be identified, all of which have direct or indirect implications for the rules that govern the financial system:

  • Ethical and impact finance: aligning finance with individual values and social purpose
  • Institutional stewardship: placing sustainability factors in the heart of mainstream financial sectors, most notably investment management – for example, the Law Commission’s review of fiduciary duty.
  • Enhancing capital markets: incorporating sustainability into equity and debt market disclosure, analysis and capital raising – for example, mandatory reporting of greenhouse gases on the London Stock Exchange.
  • Prudential governance: embedding sustainability into the safety and soundness of key sectors and the system as a whole – for example, the Bank of England’s review of insurance and climate change.
  • Public balance sheet: mobilising fiscal and other resources to facilitate the transition to a low- carbon, green economy – for example, the launch of the world’s first Green Investment Bank.

The paper goes on to make recommendations on enhancing the UK’s leadership on sustainability.

 

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