Shocked Green Fund Managers Say UK Shift Risks Investment Plans

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Some of the world’s biggest green investors are voicing dismay and bewilderment as they struggle to digest the UK government’s stated intention to wind back key climate commitments.

“It was a complete shock,” said Ian Simm, founder and chief executive of London-based Impax Asset Management Group Plc, a low-carbon fund investor overseeing close to $50 billion in assets. Britain’s official policy now represents “a risk for anyone considering an investment in the UK that’s dependent on government policy,” he said.

For Impax, the takeaway is there’ll now “be fewer developers of projects in the green space,” which means “less deal flow for us,” Simm said in an interview.Sunak said in a speech last week that he would push back by five years to 2035 a plan to bar the sale of new petrol and diesel cars, casting the decision as an effort to protect families struggling with bills.

Sunak himself said it’s “absolutely wrong” to characterize his announcement as a watering down of Britain’s climate goals. He said the changes simply represented a “new approach” intended to help place more emphasis on consumer needs. The UK had put green finance at the heart of the COP26 climate summit in Glasgow back in 2021. As chancellor at the time, Sunak laid out plans to make Britain “the world’s first net zero aligned financial center.”

There’s also concern that Sunak’s pivot away from a green agenda may give businesses an excuse to water down their own efforts, creating a chain reaction of climate backtracking across the country.

 

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