UK Export Finance (UKEF) has committed to decarbonising its financial portfolio and to increasing support for ‘green exports’ as part of its efforts to become a ‘net zero’ organisation by 2050.
The UK’s export credit agency launched its new climate change strategy today (22 September) which included targets to increase its support for clean growth, renewables and climate adaptation exports.
Carbon neutral
UKEF currently has a £50bn capacity to support UK exports through loans, insurance and guarantees, and issued £12.3bn of financial support last year.
This capacity will be entirely carbon neutral by 2050 on a net basis, the government said.
According to Reuters, a Board of Trade report predicted demand for green trade could be worth £1.8 trillion pounds a year by 2030, delivering up to £170bn of export sales in goods and services for Britain.
Ambitious plan
Anne-Marie Trevelyan, the new international trade secretary, said the plan was one of the most ambitious of any export credit agency worldwide.
“UKEF’s net zero pledge shows the UK’s climate leadership and is an encouragement for other countries to follow suit,” she said.
“Its world-leading financial products help British businesses capture billions of pounds worth of foreign deals, boost green exports and give hope that temperatures can be kept in check,” she added.
Five pillars
With the UK-hosted UN climate change conference COP26 taking place in Glasgow in less than 50 days, the UKEF’s climate change strategy is based on five pillars to help UK exporters prepare for a net zero world.
The UKEF will:
- Increase its support for green exports
- Reduce greenhouse gas emissions from its financial portfolio
- Improve understanding and mitigation of its climate-related financial risks
- Report against climate-related commitments, enhancing transparency and disclosure
- Lead internationally, encouraging others to follow UKEF’s lead and set ambitious climate targets
Interim milestones
UKEF is setting interim milestones and will over the next four years provide more detail on emissions for its most carbon intensive projects. It will also establish new climate change stress testing and increase its financing for green projects.
The agency will then publish another strategy to detail progress on its path to net zero in 2025.
Green potential
The government sees green technology as having huge exports potential.
A green trade report from the Board of Trade in July highlighted the “major opportunity for the UK, creating high-value jobs in the low-carbon economy, driving sustainable growth in all corners of the nation, and fuelling technological innovations”.
Existing support
Following the report, the UKEF signposted its existing support for clean growth businesses including its general export facility, export development guarantee (EDG), and export finance managers to help business access funding.
UKEF-supported clean growth projects have included the £1.7bn Cairo monorail, wind farms in Taiwan, and £500m research support for Jaguar-Land Rover.
