Place has been a missing dimension to date in discussions around financing climate action – and recovery from Covid-19 is the opportunity to confront climate risk, build resilience and deliver a just transition with place-based action at the heart of it.

That was the message from Nick Robins, who leads PCAN’s finance platform, at a webinar on 18 September, which welcomed Caroline Lucas MP as keynote speaker. They were joined by panellists Bruce Davis of Abundance, Andy Gouldson, Professor of Environmental Policy at the University of Leeds and Chair of Leeds Climate Commission, and Kaisie Rayner, Climate finance expert and member of Edinburgh Climate Commission. The webinar was chaired by Sophia Tickell, Strategic Adviser of Banking on a Just Transition.

Green recovery must be fair

Green Party MP Caroline Lucas, who gave the keynote address, said that the government’s £3bn commitment to date for a green recovery was “pitiful compared to the billions being funnelled into reviving the old economy, adding to carbon emissions, pollution and social harm” and that the IPPR had identified £30bn was required.

She identified areas that could help deliver the kind of finance needed, pointing to the recently published Reset inquiry from the All Party Parliamentary Group on the Green New Deal, which had fairness at its heart.

“Notably, we found that two thirds of UK adults want the government to prioritise the health and wellbeing of citizens over GDP growth – with only 1 in 5 thinking that growth should remain the UK’s main economic goal.”

Mission for banking

Highlighting a particular issue around the “invisibility” of finance and how people think about their lives, recovery and the climate, Caroline Lucas said the public disconnect needed to be addressed. She set out her own recommendations for the finance sector, top of which was a publicly owned National Investment Bank, completed by a diverse range of local and regional banks embedded in communities.

She concluded with a call to review corporate governance, and a challenge to the Bank of England to lead the way by redefining its mission of promoting the good of the people of the UK by maintaining monetary and financial stability, so that “the good of the people” establishes the right to a safe and equitable future, creating more leverage for transformative action.

Levelling up

Nick Robins, who is Professor in Practice for Sustainable Finance at the Grantham Research Institute, LSE, presented the findings of dialogues in Belfast, Birmingham, Bristol, Cardiff, Cornwall, Edinburgh and Leeds conducted for the Banking on a Just Transition project.

Examining how financial institutions can incorporate a place-based focus, and what financial instruments could be best used to channel capital into place-based action is key, he said. Prioritising place in the just transition is essential to ensure the national goal of “levelling up” economic and social prospects is driven across all regions, an imperative brought into sharp focus by the impact of Covid-19.

Outlining roles for investors and banks, together with a range of policy interventions, Professor Robins said the next steps were for a government plan to mobilise finance behind a green and just economy, as well as commitments from financial institutions,  place-based financial innovation and international action to deliver an ambitious result at COP26.

Responding to the climate emergency

The exciting potential for green bond schemes (such as the Community Municipal Investments already under way in Warrington and West Berks) were also remarked on by Caroline Lucas. Bruce Davis, co-founder of Abundance, which is leading in this field, agreed. Pointing to the 260 councils that have already declared climate emergencies, he said: “Local authorities are purpose-driven institutions and we need to come up with an approach to investing in green projects that understands that.”

Andy Gouldson, Chair of Leeds Climate Commission, also called for the green recovery to be tailored to the climate emergency, but said the focus needed to be on programmes rather than projects. It was vital for places to be proactive, he stressed: “We have to do stuff despite national government. There is so much scope for local innovation, but it has to be cohesive. We need to focus on doing the right things and not just cherry-picking the easy options – and also not doing the wrong things because the power of that is even greater.”

Wealth of funding opportunities

Financial expert Kaisie Rayner, who contributed to Edinburgh Climate Commission’s timely green recovery report, also said there was no time to waste. “We need to take worthy ambitions and put them into action.” She reminded the webinar participants about how the banks were bailed out following the financial crisis in 2007-8 and said green gilts and sovereign bonds can make a big difference. “We should do this now for a sustainable future – there is a wealth of funding opportunities at the local level.”

Kaisie also called for people to “point out the bad stuff” and that large investors needed to take their responsibility  seriously and remind big corporations who owns them. “Can you trust these corporations? Not necessarily. It’s important to keep holding their feet to the fire.”

Watch the webinar recording here