Themes / Investing in the Future
The CUSP work programme is looking at sustainable finance from various angles. Our research aims to develop a powerful new framing of investment in terms of a meaningful ‘commitment to the future’. This framing is motivated in part by the lessons from the financial crisis, where speculative, short-term investment was instrumental in undermining financial stability, and in part by the investment needs inherent in the transition to a sustainable, low-carbon economy. Resource productivity, low-carbon infrastructure and the protection of habitats and ecosystems all demand a new portfolio of investment with new governance and facilitating conditions. For latest updates on our finance research, please see the news page.
INVESTING IN THE FUTURE
In the UK, investment levels remain at less than half needed to meet our carbon budgets. The challenge is not lack of capital, but a lack of confidence. We need a policy framework that makes investment in low carbon energy generation infrastructure attractive, to boost private spending and growth in this sector, create jobs and generate higher tax revenues for government.
One of our core projects, ‘Investing in the future’, is carried out together with the Aldersgate Group, an alliance of leaders from business, politics & society driving action for a sustainable economy. Based on its strong relationships with businesses and financial institutions involved in the green or low-carbon economy, we are focusing on what changes are necessary at a policy, regulatory and business-model level to increase the flows of finance towards green infrastructure projects in areas such as energy efficiency, renewable energy and the improvement of valuable natural assets.
The UK serves as the concrete case study and anchor for the research but the work also draws on examples from the EU and beyond. The research focuses on a variety of investments including: low carbon energy; ecological investment in ‘natural capital’ and resource efficiency or ‘circular economy’ projects.
Strategic government intervention can maximise opportunities for private green infrastructure investment, our project report finds, setting out a full list of recommendations for government and industry. Our recommendations consider low carbon energy generation, energy efficiency, natural capital and resource efficiency − all key areas for delivering the UK’s environmental and social goals. Our report tackles the common structural barriers across these different types of infrastructure, echoing several findings of the EU’s High Level Expert Group on Sustainable Finance (HLEG) in the UK context.
There are specific barriers to each type of green infrastructure investment, which we discuss in greater detail in four separate briefings published alongside the above report. You can access these below.