Green finance supports regional decarbonisation, but more required

A new report from the Midlands Engine Observatory looks at what green finance is already available, and what might be needed in the future.

Through interviewing innovation leads, business relationship managers, fund managers, and officers at regional Growth Hubs and LEPS, the report shows that many businesses are aware of the Net Zero agenda. An increasing number of businesses are seeking to invest in green technologies, but levels of investment remain low. Findings of the report include:

The Midlands Engine has many businesses and researchers working in green energy and low carbon technologies. However, some of our region’s traditional sectors, such as textiles or automotives, are still carbon intensive. The Midlands’ weaker economic performance of  makes it harder for businesses to decarbonise.

Green finance is still a new area of finance and is difficult to categorise. Consequently, it is difficult to estimate how much green finance is available for the region.

A lot of the funding available is to support novel technologies. However, many technologies have already been proven, and therefore not eligible for support. There needs to be better support to help commercialise green technologies.

The region’s infrastructure is currently able to support Net Zero targets. There is little research on what changes to our national and regional infrastructure are required, and there is also very little finance available to support infrastructure developments. Infrastructure has the most potential to reduce (and capture) carbon emissions in line with the Net Zero targets.

Local authorities have a role to play in supporting green finance. This may include issuing green bonds. Local authority climate green bonds could raise as much as £3 billion, but not local authorities in the Midlands are involved in this.

Further research is required to better understand the region’s demand for green finance, as well as how to help businesses decarbonise.

The report is available here: https://bit.ly/3JtNROc