UK energy secretary Ed Miliband has laid out Government plans to back banks and big business in creating climate plans that will boost clean energy investment, even as new figures reveal major UK financial institutions continue to invest in the fossil fuel industry.

Looking to ‘unlock billions’ for the UK’s growing clean energy sector, Miliband told an audience at an opening address for London Climate Action Week that the Government’s approach would ‘transform our leading financial services sector into a global hub for green investment’

The approach will be built around three core pillars, starting with new Sustainability Reporting Standards that aim to give investors clear and consistent information about financial risks and opportunities related to sustainability. 

It will also include a voluntary registration scheme for organisations that verify sustainability reports, and more support for the Government’s commitment to ensure UK-regulated financial institutions, including banks, asset managers, pension funds and insurers, as well as FTSE 100 firms, develop and implement credible climate transition plans.

That means some of the biggest UK businesses, those bringing in tens of billions to the economy, will be forced to outline exactly how they intend to adapt and transform their operations, strategies, and business models to align with their climate goals.

Launching fresh consultations on how to take forward the Government’s plans, Miliband said: “This government is determined to make the UK the sustainable finance capital of the world as we seize the huge economic opportunities provided by clean energy.

“Through our clean energy superpower mission and industrial strategy, we can win this global race and accelerate investment into these sectors – growing the economy, turbocharging the transition to net zero and delivering on our Plan for Change.”  

Stimulating more private investment in clean energy has been a flagship policy for Labour since taking office, with the Government hoping to make the UK a clean energy superpower and the ‘sustainable finance capital of the world’.

However, this might prove to be an uphill battle, as the latest figures from the 16th annual Banking on Climate Chaos report recently found that some of the UK’s biggest banks are still heavily involved in financing the fossil fuel industry.

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According to the report, Barclays, headquartered in London, was the largest fossil fuel financier in Europe last year at $35.4 billion (£25.8bn), while HSBC contributed $16.2 billion (£11.7bn) to the industry, and Standard Chartered $11.2 billion (£8.1bn).

Of the 65 major global banks examined, the study found that Britain was the homebase to five banks which handed out tens of billions to the fossil fuel industry last year alone, in the form of loans, bonds and acquisition financing, while the top three fossil fuel financers, JPMorgan Chase, Bank of America and Citigroup, also have offices spread across the UK.    

Although it’s unclear whether the financing strategies and investments of these institutions will fall under the scope of the Government’s sustainability ambitions, the success of the UK’s clean energy economy requires the buy-in of the firms powering it.