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Green Investment Must Look Beyond Clean Energy Alone


Tackling the environmental and climate emergency needs a full arsenal of investable technologies aimed squarely at cutting emissions to net zero.   –But this must go hand in hand with investment to  reverse the alarming decline in nature

The UK government recently launched its Green Finance Strategy on the heels of legislation that will result in the UK becoming the first country in the G7 to move to net zero emissions by 2050. These policy measures are certainly impressive. Policy-makers and investors are clearly getting the picture that without robust, investable technologies deployed at scale we all face the catastrophic consequences of accelerating climate change. Yet it is crucial they do not become fixated on green energy as a panacea.

While the UK’s record on cutting emission through the greening of the energy sector has been world class, policies aimed at directing capital into renewable energy must go hand in hand with investment in  biodiversity, natural capital solutions and environmental sustainability.

Research carried out by economists Eunomia Research for the Green Purposes Company (GPC) has mapped the landscape of green investments in areas relating to the five green purposes of what used to be known as the Green Investment Bank (GIB), now referred to as the Green Investment Group (GIG).

A not-for-profit company, the GPC owns a special share in the GIG to safeguard its green mission. In addition to reducing greenhouse gases and advancing the efficiency in the use of natural resources, the green purposes aim to protect and enhance the natural environment and biodiversity, as well as promote environmental sustainability.

Fulfilling these purposes should include natural capital solutions (NCS), according to the report. Overall, NCS are not sophisticated technologies that need high levels of investment. Reforesting millions of hectares sequesters billions of tonnes of carbon dioxide, supports livelihoods and boosts economic growth.

Although there is a strong international consensus to restore and protect land-based ecosystems, there has been little concerted effort by governments and investors to advance these solutions, which provide a cost-effective path to a lower carbon and more environmentally sustainable world. Research by The Nature Conservancy and 15 other institutions found that with concerted global action between now and 2030, better land stewardship offers 37 percent of the solution for keeping global temperatures to 2 degrees Celsius or below — the same as if the world today put a complete stop on the burning of oil.[1]

There is, however, a surprising imbalance in investment in nature-based solutions, which globally trail renewable energy and energy efficiency financing by a factor of ten to one despite evidence they have worked around the world on a large scale.

Admittedly, financial returns from renewable energy generation and energy-from-waste are generally lower risk because the technologies have matured and long-term contracts and other financing mechanisms have become established over recent years. For biodiversity, natural capital and environmental sustainability investments however, direct revenue streams are not so readily available, but such opportunities do exist.

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