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Insights and News /

04 November 2021 1 min read

Relationships required for delivering net zero

James Belmont

James Belmont
Partner | Finance, risk and compliance | London

Jim Fitzgerald

Jim Fitzgerald
Director | Energy, utilities and resources | London

The relationship between government, corporations, and the financial community is central to achieving net zero.

 

Government has a crucial role in providing regulatory and policy certainty for corporations and financial institutions. Steps like the one made by Rishi Sanak during COP26 are a move in the right direction to help create the necessary funding required for our net zero transition.

We are looking for government to set real policy around the shift in initiatives such as hydrogen, heat pumps, and electric cars to support a just transition, as well as the skills and training to support  corporations being able to deliver on net zero targets.

Companies require government policy to be in place to support net zero commitments across two distinct types of decarbonisation technologies: deployment of mature technologies such as onshore wind and solar and development of new technologies such as hydrogen and CCS. These two decarbonisation options require different policy responses from governments to help companies to appropriately reduce and share the supply chain risks. This will then allow companies to develop structures that facilitate financial investors to deploy capital at scale.

The financial community is also now being asked to take a very active role in changing the makeup of the real economy to achieve a societal outcome. The concern for the financial services sector is that if financial institutions are required to finance net zero, without governments simultaneously driving change in the real economy through policy, this could result in creating systemic risks, rather than delivering net zero.

 

To find out more, or to discuss how we we can help you, please email Jim FitzgeraldJames Belmont or Caspian Conran.