How can governments attract the necessary funds for the low-carbon transition? What are real-world examples of governments disclosing climate-related spending and financing needs? What lessons can be learned from the UK’s Green Gilt programme?Our public event, “
Making national climate action investable: why and how?” on Wednesday 26 February brought together the private and public sector experts to explore potential answers to important questions of our time. This event was organised by the Transition Pathway Initiative Centre (TPI Centre) and the Centre for Economic Transition Expertise (CETEx), both based at the London School of Economics and Political Science (LSE).
The event built on the key findings of the
ASCOR State of Transition in Sovereigns 2024 report of which
Antonina Scheer, Policy Fellow, Research Project Manager at the TPI Centre, was the lead author. The report is part of the Assessing Sovereign Climate-related Opportunities and Risks (ASCOR) project, to which the TPI Centre is the academic research expert.
During the panel discussion, the speakers discussed a range of questions and provided their perspectives. As the recording is not available, a discussion summary will be posted on our website soon. In the meantime, for a taste of the discussion, below are some key quotes from our speakers:
Commenting on the usefulness of green or labelled bonds to fund the measures needed to achieve countries’ nationally determined contributions (NDCs),
Jessica Pulay, Chief Executive Officer of the UK Debt Management Office (DMO) said: “What was really encouraging in our first issuance of green bonds (or green gilts) was, that investors, who had not previously participated in the gilt market, began investing in green gilts. Since then, the UK’s Green Financing Programme has provided some important additionality to the traditional gilt investment community.”
Discussing the importance of NDCs in investment decisions,
Rahul Ghosh, Global Head of Sustainable Finance at Moody' Investors Service, said: “While government spending will need to rise to meet the climate investment gap, early investment will reduce the economic and financial costs of climate change over time. Governments that have credible mitigation and adaptation plans will be better able to absorb the near-term credit impact of higher spending and establish long-term credibility.”
Thomas Dillon, Head of Sovereign ESG, Aviva Investors, added: “NDC's have been our sovereign engagement priority for the last year. In the context of fiscal constraints, we think NDCs are a great opportunity for governments to catalyse much-needed private investment and action, to underpin renewed ambition. But to do that, NDCs need certain features that make them credible and investment relevant. That can include sector pathways, indicative policy frameworks and investment plans.”
Mark Manning, Visiting Senior Fellow, CETEx, LSE, said: “Governments should start viewing NDCs as
strategic national transition plans that mobilise the whole of government towards a collective goal and guide their investment decisions for the future. By linking with private sector transition plans, enhanced NDCs can also help to steer a whole-of-system response - unlocking not only sovereign transition finance, but transition finance across the whole economy.”
Reflecting on the ASCOR's contribution to the sovereign climate actions,
Antonina Scheer said: "It is really exciting that the research we have done on the
ASCOR tool sits at the intersection of the issues that countries and investors are facing to reach the NDCs. ASCOR contains the ingredients that can make country transition plans investable."
Carmen Nuzzo, Professor in Practice, Executive Director, TPI Centre, LSE, who chaired and moderated the event, observed: "The variety of perspectives on the panel, bringing together policymaker, investor, credit rating agency, regulatory and academic participants, highlighted how important is the collaboration of different stakeholders: NDCs are set by sovereigns, but the investments facilitating them, either financial or in the real-economy, depend on the engagement of many key different actors.”
For further information on our research and data, please visit our websites:
TPI Centre: https://www.transitionpathwayinitiative.org/CETEx: https://cetex.org/Finally, as ever, we welcome your feedback. If you attended the event, we would be grateful if you could fill out the
post-event survey. It will take only a few minutes.
