The Finance & Leasing Association (FLA) is urging the UK government to implement several measures to support green finance and help achieve the country’s Net Zero goals.

In a statement, the FLA said: “Preparations for 2050 will affect every person, home, business and public service in the UK as we all rethink our transport options, heating choices and power needs.

“This will require a ready supply of willing-to-lend lenders, matched by demand from ready-to-borrow customers.

“Currently, the UK does not have an adequate supply of either, but the Green Manifesto identifies the perfect conditions for rectifying this and creating economic growth.”

The FLA’s proposals focus on policies that would aid the financial sector in backing sustainable investments. Key suggestions include:

1. Policy Consistency and Green Taxonomy: Establishing a clear and consistent framework for green assets, allowing businesses to invest with confidence. The FLA advocates for a detailed green taxonomy and matching government commitments to provide certainty for investors.
2. Infrastructure Investment: The FLA highlights the need for private sector involvement in developing green infrastructure, such as electric vehicle (EV) networks. Creating a robust used EV market would improve data on residual values and broaden EV ownership.
3. Risk Sharing with Government: Given the tight timeline for the Net Zero 2050 target, the FLA recommends government risk-sharing measures to lower financing costs for consumers and lenders, smoothing the green transition.

Additional proposals include reforming the outdated Consumer Credit Act, creating green-focused securitisation vehicles, enhancing the British Business Bank’s green lending support, reducing VAT on public EV charging, and offering tax incentives like Green Interest Relief at Source (GIRAS).

The FLA also calls for clarity on the Zero Emission Vehicle Mandate and policies to promote energy-efficient homes.

These measures aim to ensure that financial institutions can play a pivotal role in achieving the UK’s environmental goals.

FLA Green Manifesto 2024

The proposals come as Chancellor Rachel Reeves prepares to deliver her first Budget on 30 October.