Can the UK make a green Covid 19 recovery?

Can the UK make a green Covid 19 recovery?

More than 200 top UK firms and investors, from both multinational and national businesses across industry sectors including energy, finance, consumer goods, retail, construction, water and communication are calling on the government to deliver a Covid-19 recovery plan that prioritises the environment.

In a letter towards the UK Prime Minister the firms made a number or recommendations:

  • “Driving investment in low carbon innovation, infrastructure and industries;
  • Focus support on sectors that can best support the environment in order to increase job creation and foster the recovery – whilst also decarbonising the economy;
  • Tie financial bailout support to sector and company commitments to climate goals, for example for airlines;

According to firms and investors that sent the recommendations to the UK PM, “implementing an ambitious ‘green’ recovery package, with clear pathways for companies to build aligned strategies and for investors to direct capital into ‘green’ projects at scale is now a matter of necessity, not choice.”

Although these are hard-times for almost all industries, in our engagement with global equity markets we detect a general acceptance that the transition towards the controversial net-zero carbon emissions target is either unavoidable or a necessity. In the UK this acceptance seems underpinned partly by the perception of significant long-term investment opportunities across the regions and some trust in the solidity of the foundations of the UK’s green economy, which was worth £42.6 billion in 2018. 

We also detect some belief in the ability of the 2019 Government’s Green Finance Strategy to drive growth. From a more qualitative perspective a cleaner, greener environment has more public support since Covid and is expected by the public to lead to greater ‘wellbeing’ and better underlying health – which has to point to savings for the UK’s ever popular and ever uncontrollably expensive public health system, the NHS.

At some level this confluence of forces could be the making of the kind of policy politicians fantasise about…popular and inexpensive (net net of course).