Against the backdrop of the UK government announcing a transition to net zero by 2050 and a new Ten Point Plan for a Green Industrial Revolution addressing clean energy, transport, nature and innovative technologies, BNP Paribas experts joined TheCityUK's discussion to delve deeper into the drivers of transition.
Our experts joined TheCityUK's 2020 conference to unpack the latest developments propelling the UK economy's transition towards net zero.
"Pathways to net zero need to be recognised as the pathways to economic recovery and prosperity"
BNP Paribas UK Country Head Anne Marie Verstraeten participated in a fireside chat with Dr Rhian-Mari Thomas, Chief Executive, Green Finance Institute (GFI), in which they reflected on the UK's pathway to net zero, including sector decarbonisation opportunities - notably in transport and the built environment. It also included a reflection on the work of the GFI's Coalition for the Energy Efficiency of Buildings (CEEB), of which BNP Paribas is also a member. This is especially important for decarbonisation, given that the building stock is responsible for around 30% of the UK's greenhouse gas emissions.
During the discussion, Dr Thomas noted that "pathways to net zero need to be recognised as the pathways to economic recovery and prosperity", focusing on how the green recovery is essential as companies and investors mobilise capital to build back better. There was also an emphasis on the tangible action required, with Thomas emphasising that the financial industry needs to "break down the challenges and ensure we are engaging with the right actors across the value chain".
Verstraeten agreed with this approach of tangible transition, saying: "We at BNP Paribas have worked on aligning sector lending policies with the Paris Agreement objectives, whilst also engaging and supporting clients who have genuine transition strategy". In the UK, science-based engagement recently included supporting UK retailer Tesco to close a £2.5bn sustainability linked loan tied to Scope 1 and 2 CO2emissions, renewable energy installation and food waste reduction.
The conference focused on 'Recovering, Rebalancing, Revitalising', with the bank's experts discussing how the financial industry is adapting, innovating and delivering solutions in light of the climate crisis and the Covid-19 pandemic.
The green finance agenda also steered the panel on 'the role of industry in decarbonising the UK economy towards net zero', featuring BNP Paribas Markets 360 sustainability analyst Trevor Allen. The discussion was moderated by Tessa Walsh, Green and ESG Financing Editor, Refinitiv, and featured sustainable finance specialists from the University of Cambridge Institute for Sustainability Leadership (CISL) and BNY Mellon.
The panel said transparency was an essential lever to scale up sustainable finance, and Trevor Allen noted that "green bonds provide transparency and external audits to understand eligibility of projects", ultimately supporting a "transition path". Green bonds are being issued across more diverse sectors, recently including the automobile sector, where companies are increasingly committing to transition towards electric vehicles, as well as reducing their operations emissions within the supply chain.
The panel also focused on how financial institutions need to support their clients in scaling up decarbonisation, the role of product innovation and harmonised disclosure standards. Dr Nina Seega, Research Director, Centre for Sustainable Finance, CISL, highlighted the institute's recent Bank 2030 research, which explains how banks can move from banking-as-usual to a 'zone of institutionalisation' in which a forward-looking, active mindset recognises low-carbon opportunities.