A senior executive at the UK’s National Wealth Fund has criticized the country’s banks and money managers fo
r what he characterized as their failure to embrace the risk levels needed to drive the low-carbon transition.
“What I’m not seeing is enough appetite from the banks and the insura
nce companies, from the pension funds and institutional investors
” to finance the low-carbon transition, said Ian Brown, the wealth fund’s head of banking and investments.
Speaking at Barclays Plc’s Sustainable and Transition Finance Conference in London on Wednesday, Brown said t
he wealth fund he helps run is taking on “a lot of risk” to support deals such as financing a gigafatory in Sunderland
and tin mining in Cornwall. But Britain’s net zero targets will be realized only “if the private sector comes along with us,” he said.
A lack of investment has coincided with the UK falling behind on a number of key green goals. On Wednesday, it emerge
d that the target of having a clean power grid by 2030 is now at risk of slipping out of reach due to a lack of energy generation
and network infrastructure, according to a report by the House of Lords Industry and Regulators Committee.
Brown said it would be unrealistic and impractical to rely on the public purse to finance Britain’s path to a low-carbon future.
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“It’s not feasible, and I don’t think it’s reasonable, to ask the taxpayer to bear the burden,” he said.
The National Wealth Fund has £27.8 billion ($37.6 billion) in public money, which UK Chancellor Rachel Reeves says
is intended to “unlock tens of billions more in private investment.” The
fund, which is the re-branded UK Infrastructure Bank, can use a broad range of financial instruments, includi
ng equity, concessional debt and guarantees to help lure private investment.
Delivering the net zero transition globally comes with a price tag of over $200 trillion over the next three decades, accord
ing to BloombergNEF. Last year, however, investment was just above $2 trillion, as large sections of the private se
ctor balk at declining asset valuations and lackluster returns on their investments.