The UK must spend an extra £14 billion a year to meet its climate commitments, finds a new report, as Environmental, Social and Governance (ESG) funds rocket by 40 per cent in one year. Meanwhile, almost half the UK’s power came from renewable sources in the first quarter of 2020 in a new record, the Queen’s private banker Coutts pledges to slash its carbon emissions and air pollution rebounds as lockdown eases and cars return to the roads. It’s the Good With Money news brief.
Extra £14 billion per year is needed to save climate
An extra £14 billion is needed each year to help the UK meet its climate commitments, according to a new think tank report.
Green Alliance says the money is essential to pay for clean transport, nature restoration, and low-carbon buildings. It claims that in the last three years, £9 billion has been spent on projects that increase CO2 such as roads.
The stark assessment comes as large UK businesses make a promise to ‘kick-start a new approach’ and ‘put the environment first’. The Green Alliance think tank insists though that the funding issue must be solved in the prime minister’s economic recovery speech expected tomorrow (Tuesday).
Its calculations are based on the government’s own assessment of major projects in the pipeline released on 16 June.
While the government has said it is determined to meet carbon targets, the new report draws attention to ministers’ plans to spend £28 billion on roads.
A separate report by the Institute for Public Policy Research has concluded that Britain is “acutely vulnerable” to the enormous effects of an “environmental breakdown” and is not ready for the “policy challenge” required to prevent it.
Meanwhile, a new YouGov poll has revealed that 94 per cent of the UK public want the way the economy is run to change following the pandemic.
ESG funds up 40% in one year
The number of new Environmental Social and Governance (ESG) funds rose by a massive 40 per cent last year, according to new figures from The Investment Association.
The trade body says the explosion of ESG funds highlights a shift in investor priorities due to the climate emergency.
However, despite this 12-month spike, The Investment Association said just six per cent of all funds on the market are currently classed as ESG – a total of £1.2 trillion in funds under management.
Evidence shows that ESG funds have outperformed their traditional rivals throughout the coronavirus.
Fund managers The Private Office (TPO Invest) has revealed that its diversified portfolio fell by 16.63 per cent from February 20 to March 23 this year, compared with a 13.77 per cent fall in its ESG portfolio.
Renewable energy breaks UK record
Renewable energy made up almost half of Britain’s electricity generation in the first three months of 2020, according to new figures.
The UK’s renewable energy data includes electricity from wind farms, solar panels and hydro power plants across the country as well as bioenergy generated by burning wood chips instead of coal.
It reveals that renewable energy made up 47 per cent of the UK’s electricity generation in the first quarter of the year, smashing the previous quarterly record of 39 per cent set last year.
The “substantial increase” was driven by a growth in electricity generated by solar panels and wind farms which climbed by more than a third over the last year, according to the government’s energy analysts.
The UK’s unusually wet and windy weather at the start of the year – particularly storms Ciara, Dennis and Jorge – helped to generate record wind power generation.
Offshore windfarms powered the largest increase in renewable energy in the first quarter of the year, climbing by 53 per cent compared with the previous year, while onshore wind generation grew by a fifth.
In total, wind power generated 30 per cent of the UK’s electricity in the first quarter, beating the previous record of 22.3 per cent set in the final months of 2019.
Private banker to the Queen sets carbon pledge
British wealth manager and private banker to the Queen, Coutts, has pledged to cut carbon emissions in its funds and portfolios by a quarter before the end of 2021.
The bank, part of RBS Group, has also introduced climate-linked exclusions for the first time. It has committed to excluding all companies that get more than 5 per cent of their revenues from thermal coal extraction, tar sands, or Arctic oil and gas exploration.
It will also exclude any company that gets more than 25 per cent of its revenue from thermal coal energy generation, as part of a broader drive to reach a 50 per cent reduction in its carbon emissions across all its holdings by 2030.
Leslie Gent, Coutts’ Head of Responsible Investing, said it was vital the bank held itself accountable and called on regulators to ensure reform. He said: “To date, there has been a lot of carrot and not much stick and we believe that regulators should harden their stance to help drive real change.”
Air pollution rebounds as UK lockdown measures ease
Air pollution is rebounding in the UK as the lockdown eases and cars and vans hit the road again.
Nitrogen dioxide (NO2) pollution, mainly caused by traffic fumes, fell dramatically in the weeks up to early May as people were advised to stay at home.
However, the easing of some restrictions later that month has caused pollution levels to climb once more, according to analysis by Rohit Chakraborty at the University of Sheffield.
Cities including Leeds, Manchester, Oxford, Sheffield, Cambridge, and London all recorded double digit growth in NO2 pollution between the first and second weeks of June.
In Sheffield, NO2 levels have jumped 78 per cent compared to their lowest point during lockdown. In Bradford, pollution levels have risen 116 per cent from their April low.