The UK’s fading leadership on climate

This week (1-7 July) is being celebrated as the UK Government’s Net-Zero Week, a campaign aimed at increasing public participation in the net-zero transition and providing practical advice to organisations across all sectors. 

The irony, however, is glaring. Just as the week commenced, The Guardian revealed that under Prime Minister Rishi Sunak, the UK government is preparing to backtrack on one of its most significant commitments to the international climate cause.

A broken promise: £11.6bn pledge abandoned

The UK made a flagship pledge at COP26 in 2021 to provide £11.6bn of international climate and nature funding, doubling its previous commitments. This promise, presented in Glasgow by then Prime Minister Boris Johnson alongside then-Chancellor Rishi Sunak, was seen as a testament to the UK’s responsibility as a climate leader on the global stage. Unfortunately, this commitment is now seemingly in the crosshairs of fiscal cutbacks, sending a worrying signal to the world.

Unravelling the green initiative

The Climate Change Committee (CCC) recently published a rather unfavourable assessment of the UK’s climate action. The report concluded that the UK is no longer perceived as a world leader in climate action. Despite over 3,000 pages of new detail, the UK’s 2050 net-zero commitment is deemed as bereft of credible delivery plans. As we know, achieving such ambitious goals is next to impossible without a clear roadmap.

Foreign Office minister Zac Goldsmith’s resignation last week adds further weight to these criticisms. In his candid resignation letter, Goldsmith condemned the government for its wavering environmental commitment and retracting its climate leadership on the world stage. The jettisoned animal welfare bill and the impending cut of the £11.6bn climate and environmental aid stand as stark examples. Goldsmith accused Prime Minister Sunak of a lack of interest in environmental concerns, causing a climate policy paralysis in Whitehall.

The Skidmore Review: A missed opportunity

The Skidmore Review brought into sharp focus the UK’s policy and regulatory shortcomings. The report noted the government’s inability to adequately capitalise on the social and economic benefits of the net-zero transition, notably failing to rapidly expand emerging cleantech markets for export. It cited China’s increasing prowess in wind and solar energy and intensifying global competition in fields like hydrogen and electric mobility, indicating missed opportunities for the UK.

Looking forward

In the absence of clear government direction, the onus is on other sectors to highlight the potential benefits of a well-managed transition. Asset managers have a critical role to play in leading the charge. Their investment decisions can shape the success of the net-zero transition, help harness the full potential of emerging green markets, and underscore the long-term viability of sustainable investment.

The current climate scenario presents both a challenge and an opportunity for asset managers. By aligning portfolios with a greener, more sustainable future, they can not only deliver attractive returns for their clients but also contribute to achieving the broader climate goals. Let’s not forget: the transition to a sustainable, net-zero economy is not just an obligation—it’s an opportunity. And as the government wavers, asset managers are uniquely positioned to seize it.

 

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