Investing in tomorrow: Private capital’s role in the green transition
This report sets out to demonstrate the important role private capital plays in supporting the green transition. Our industry is a natural partner for the Government’s commitment to reach net zero by 2050, possessing deep pools of capital, a wealth of strategic experience and a focus on long-term value generation.
Accelerating the green transition to a level where we will be able to meet our commitment of net zero by 2050 will require a monumental effort, alongside tens of billions of pounds in additional investment. Here, private capital can provide critical backing that will allow companies to become more sustainable and improve the climate resilience of their operations.
Making progress on climate goals is more than just a moral imperative, it is critical for businesses’ long-term economic viability. That is because embedding sustainability considerations such as decarbonisation can be a critical enabler to enhance operational performance today, as well as contributing to stronger financial returns in the future.
Meeting net zero commitments and ensuring energy security for the UK is even more important in the context of current geopolitical volatility. Private capital’s capacity to provide flexible, long-term investment enables businesses to navigate periods of uncertainty, safeguard continuity and prepare for emerging challenges. At the same time, this investment approach directs resources into sectors that support energy resilience and drive the uptake of low carbon technologies, climate adaptation solutions and robust infrastructure supply chains on which the UK’s energy security and climate preparedness increasingly depends. When private capital directs capital into these areas, it not only supports the country’s ability to manage future shocks but also accelerates the transition to a more sustainable, futureproof economy.
Whether it be through its expertise in backing and growing innovative tech startup businesses such as Material Exchange who are working to change the way the fashion industry sources materials and products, or private capital’s hands on approach in helping more traditional businesses like Hawksmoor operate more sustainably, it is clear the industry already plays a central role in progressing the energy transition. However, there is an opportunity to do more and facilitate an even greater impact through investing private capital – by enhancing its ability to help modernise and decarbonise businesses as well as strengthen critical green infrastructure supply chains. Therefore, this report lays out a series of recommendations that aim to improve access to finance, accelerate capital flows and ensure regulation remains competitive on the global stage.
Taken together, these measures would ensure the private capital industry can play an even more significant role in helping the Government to build a resilient, competitive and future-ready economy.
