Green Investment Bank proposals don't yet go far enough
More clarity required over real risk position and focus for technology acceleration within key sectors.
30-06-2010 | Commenting on the proposals for the Green Investment Bank, James Vaccaro, UK managing director, Triodos Investment Management, said:
"While today’s proposals are a move in the right direction, they are yet to answer the main objective of a Green Investment Bank – to upscale the UK’s green economy enough that it can meet emissions targets while capitalising on the opportunities for employment and industry growth. We are now presented with an opportunity that we simply cannot afford to allow just to pass us by.
"It’s not just about putting more money into the sector overall. Instead, the Green Investment Bank must position itself alongside other finance providers to best accelerate some newer, less proven, investment opportunities. It is this differential which will become critical to the success, or otherwise, of the proposals in achieving the UK government’s objectives.
"This does have implications for the Green Investment Bank in terms of its own sustainability as an institution but it needs to be clear in order to achieve its purpose. Otherwise it runs the risk of being yet another fund with under-deployed capital.
"There are plenty of sectors, such as wind energy, that are financeable and, indeed, are currently being financed. However, other sectors simply are not yet ready for commercial finance. For this to happen will require institutions, industry and government to be prepared to take an appropriate risk position alongside other investors. Only by ringfencing the sectors with the biggest growth opportunity, such as marine technology, will we get close to approaching the scale needed to meet emissions targets.
"In terms of leveraging public money, it can be and is being done already through sustainable retail banking initiatives such as our own Climate Change Bonds and online cash ISA, where customers’ retail deposits help fund loans to sustainable businesses in the renewable, environment and social sectors. While greater awareness and support for green investment will help to change behaviour and shift the nation - and UK plc - into the right mindset to face the future, ultimately this model lacks the potential to meet the underlying objective of delivering scale.
"Quite simply, only government money on the largest scale will achieve the intervention required to demonstrably accelerate the growth in specific sectors. And it is through achieving these economies of scale and delivering proven track records which - in addition to all round greater awareness - will start to make the difference."
Triodos Bank has pioneered investments in some of the newer, less commercial technology businesses, such as Marine Current Turbines. Across the entire renewable energy sector Triodos Bank currently finances 275 different projects, including 175 wind farms, of which 30 are in the UK and Ireland. These projects have a combined generating capacity of one GW and currently produce around 2.25 billion kWh per year – equivalent to the energy consumption of around 630,000 households. Triodos recently helped fund UK’s largest privately owned solar array on Glastonbury’s Worthy Farm.
To find out more about Triodos Bank and its range of banking services for ethical businesses and charities, and savings and investments for individuals, visit www.triodos.co.uk or call 0500 008 720 free.
Notes for editors:
About Triodos Bank
only finances enterprises which create social, environmental or cultural added value. Key sectors include organic food and farming, renewable energy, social housing, and fair trade. Transparency is a core value: customers are informed about the bank’s lending and can target their savings to particular areas of investment. A range of personal savings accounts is offered, and full banking services are available for businesses and charities. Triodos Bank is an independent bank founded in the Netherlands in 1980. Its principles and independence are protected through a special shareholding trust. The UK office opened in 1995 and is based in Bristol.
For more information please call Lisa Stanley on 0117 980 9721 or e-mail