"The purpose of banking is to serve the real economy over the long-term"

Last week, with the support of UK Finance, the LSE Grantham Research Institute on the Environment and Climate Change published its report Financing climate action with positive social impact: how banking can support a just transition in the UK . This wide-ranging report was produced with assistance from 250 policymakers, financiers, trade unions, and academic researchers with roundtables in every corner of the country. ?Just transition? is the idea that we look to build in a place-based way, whilst considering the societal aspect of climate change, being conscious of both individual and business needs.

Speaking at the launch event Bob Wigley, Chair, UK Finance, outlined how the report on delivering a just transition to a net-zero economy spoke to the values and goals of the financial industry in putting sustainability at the core of future operations. The report sets out how the banking and financial sector and government can work together to mobilise the capital needed for an inclusive and sustainable economic recovery, one that drives the just transition to a thriving net-zero economy.

While Covid-19 has required an immediate emergency response, Bob emphasised how emerging from this crisis we have the opportunity to "build back better" by aligning Covid-19 economic responses to the transition to a net-zero economy by 2050 or within earlier specific timeframes, with many cities across the UK seeking to reach this milestone by 2030. As the report sets out, transition needs to be inclusive, place-based and sector-specific. Achieving net-zero is a difficult but essential task. Bob emphasised the need to work within current frameworks, with board members incorporating just transition into future institutional strategies as a ?key purpose? with accountability becoming more important than ever.

UK Finance has welcomed the recommendations for a just transition, and has highlighted the elements of the report that emphasised fairness, maintaining living standards, and the opportunity for new benefits under a just transition. The report's key recommendations, which focused around leadership, purpose, strategy, customers, place, policy, partnership, and accountability, provide a roadmap for the financial industry to adopt sustainable measures into its working practices in a fair and effective way.

The report attracted the support of eight consulted financial and business CEOs, with the industry statement including positive messages from Barclays, HSBC, the Ecology Building Society, Lloyds, NatWest, and Nationwide. Bob Wigley added that the report sets out ?clear steps? for how the banking and financial sector can play a crucial role in delivering a net-zero economy. Financial networks across the UK, in a regionally inclusive programme incorporating ?corporates, SMEs, local authorities and other sources of enterprise?, can be supported by a strong and forward-thinking banking and financial sector.