Championing green finance is essential to the climate’s future, but it’s an economic opportunity too, writes Chris Hayward

Achieving net zero is not just an environmental obligation; it’s an economic opportunity that can drive investment and innovation to the UK on an unprecedented scale.

Around the world, communities, industries and governments are recognising the critical need to reduce greenhouse gas emissions and shift toward a net zero economy. In a recent speech, the Prime Minister set out his ambitions for the UK to win the race to net zero. He knows as well as I do that therein lies the wealth of our country.

For us here in the City of London, this is a defining moment – a chance to showcase why we are consistently ranked as the leading centre for green finance and continue to be a leading nation on the global transition to a sustainable future.

Guildhall to welcome leaders in sustainable finance

Not only that, later this year we are hosting the fourth Net Zero Delivery Summit. The iconic Guildhall will, for the first time, host some of the world’s leading voices in sustainable finance, including large corporations, financial services firms and other international leaders. This exciting summit, taking place during London Climate Action Week, presents an opportunity for London and the UK to showcase our work and further cement London’s status as a green finance hub. By working with international partners to develop common standards and approaches, the UK can help shape a globally coordinated transition and unlock new investment flows. 

The UK’s commitment to achieving net zero emissions by 2050 has paved the way for significant investments in green finance, and as the global financial capital, the City of London plays a central role in delivering these and our own ambitions. In 2020, the City of London Corporation adopted a radical Climate Action Strategy, breaking new ground and setting out how we will achieve net zero, build climate resilience and champion sustainable growth, both in the UK and globally, over the next two decades. 

Amidst the backdrop of increasing global uncertainty, one certainty prevails: the persistent threat of climate change. As commitment to climate action fluctuates across different world regions, the UK stands poised to sustain its resolve and foster innovative collaboration with global partners. Together, we can mobilise private finance effectively to achieve the net zero ambitions. Consider the potential of carbon markets: by forging alliances with the EU to integrate our Emission Trading Systems (ETS), we can enhance market liquidity, streamline border controls, address UK concerns regarding Carbon Border Adjustment Mechanism (CBAM) and facilitate a smoother transition to net zero for both the EU and the UK.

The City is ready to lead

The summit will provide an opportunity to reflect on the progress made, discuss the key challenges ahead and catalyse action in areas such as transition finance, carbon markets, climate finance and nature finance.

We will focus on four critical topics for driving the global transition to a net zero economy. First, transition finance – the critical funding needed to help businesses and industries, especially hard to abate sectors, decarbonise – will take centre stage. The summit will also address the future of carbon markets, ensuring these systems are transparent, efficient and truly impactful in reducing global emissions. Climate finance will be explored, with a focus on mobilising capital for, and building resilience within, regions which are most vulnerable to the impacts of climate change. Finally, the summit will turn its attention to nature finance, recognising the pivotal role that nature-based solutions must play in both mitigating climate change and supporting biodiversity.

The City’s leadership in these areas is crucial. The UK has an unparalleled opportunity to harness the power of sustainable finance to unlock investment in these sectors. The UK’s robust regulatory frameworks, talent and financial infrastructure position London as the natural home for this vital work. Moreover, the ability to connect businesses, governments and the financial community to net zero opportunities is something London does best.

The Net Zero Delivery Summit is not just a meeting of policy makers, or leading voices and minds – it is a moment to drive real change. Now is the time for action, and the City of London is ready to lead the charge.

Chris Hayward is policy chairman at the City of London Corporation