Transition Finance: A Strategic Imperative for Boards

To make the most of this opportunity, it is vital to look beyond ‘green’ finance and embrace transition finance. Financing already green activities and business – such as renewable energy and electric vehicles – is only part of what is required to transition the whole economy to net zero. Capital also needs to be directed towards the decarbonisation of high-emitting sectors, including for activities that are not yet commercially viable, such as lower carbon hydrogen, carbon capture and storage, and lower carbon retrofit of buildings and infrastructure.

The scale of opportunity is significant, the Climate Policy Initiative estimates that $8.5 trillion will be needed annually by 2030 to support global transition needs. By building the frameworks, policies and tools to deliver high-integrity, investable transition finance, the UK financial sector can play a crucial role in meeting these financing needs.

This broader approach, supported by effective policy and catalytic funding, is critical for meeting climate goals and unlocking growth opportunities. For Board directors and Non-Executive Directors, the recent publication of Scaling Transition Finance: Findings of the Transition Finance Market Review highlights the importance of integrating the opportunities and risks of climate transition into financial and commercial strategy to ensure long-term resilience and value creation. In doing so, UK companies will position themselves as market leaders at the heart of the global net zero transition.

In partnership with the Transition Finance Market Review, the City of London Corporation and Chapter Zero, this briefing paper has been written specifically for Non-Executive Directors and Board members to present the key recommendations of the review and offer vital insights and discussion prompts for boards of financial institutions and real economy organisations. You can download the full briefing paper below, as well as register for our accompanying webinar.