The UK government has announced that it is bringing together a new taskforce led by senior financiers in order to encourage the growth of “green finance”. The taskforce, which will be chaired by Sir Roger Gifford, former lord mayor of London, has six months to develop proposals aimed at accelerating investment in low-carbon projects.

The UK’s climate change minister, Claire Perry, announced the initiative in New York at the opening of Climate Week. According to Perry, “The transition to a low-carbon economy is a multi-billion pound investment opportunity and a key part of this government’s industrial strategy”.

An estimated £9.97 trillion must be invested in the energy sector globally between 2015 and 2030 in order to meet the Paris Agreement targets. The UK government is keen to leverage both the nation’s traditional strength in international finance and its leading position in green investment, particularly in areas such as offshore wind and electric car manufacturing, to benefit from this.

The government will also work alongside the British Standards Institute and the City of London’s Green Finance Initiative to develop green standards to encourage responsible investment practices. These standards will serve only as voluntary guidelines. The actual impact on the behaviour of companies that continue to develop or invest in fossil fuels will depend on how widely the markets adopt and accept the guidelines. Nevertheless, investors seeking to achieve their green objectives may view the creation of green financial management standards as a potential solution, as well an opportunity for them to demonstrate their green credentials.

The taskforce will publish its Terms of Reference after holding its first meeting in late September. Whether or not the taskforce will drive green development to the extent envisaged will become apparent in the coming months.

This post was prepared with the assistance of Tegan Creedy in the London office of Latham & Watkins.