With the Conservatives gaining an overall majority, Labour losing many of its seats and the SNP taking 48/59 Scottish seats, the 2019 General Election is likely to shake up UK politics. Whilst the campaigns largely focused on Brexit, tackling climate change also featured on the main parties' manifestos. This note briefly outlines the potential impact this election will have on the sustainable, renewables and green finance sector.
A Conservative majority
There is opportunity for the green finance sector given the Conservative's drive to achieve net-zero emissions by 2050. The Conservatives aim to boost the funding to the Scottish government to improve the energy efficiency of homes, schools and hospitals which will provide an opportunity for sustainable businesses to partake in these projects.
A key policy for the Conservative party was to have a "transformational" sector deal for the North Sea oil and gas industry to move the UK towards a net zero economy leaving opportunity to develop renewables financing and the green finance sector generally.
A Labour decline
Scottish Labour made the pledge in its manifesto to provide £100bn of additional resources in Scotland over the next 10 years as well as contributing £20bn to a new Scottish National Investment bank which would aim to provide funds to local projects and small businesses. Growing green finance businesses may well benefit from this funding. SNP similarly are making this pledge.
Labour had proposed a windfall tax on oil firms, sought to cut emissions and aim for net zero emissions by the 2030s, more ambitious than both the Conservative and SNP targets. Labour also sought to create 50,000 sustainable jobs in low-carbon industries providing growth and provide opportunities for green finance involvement. Labour hope to develop the public transport networks across the country which may provide business for green finance lenders and sustainable project finance.
Despite Labour not winning the 2019 election, this is not to say that these policies cannot make it into law, but the agenda will be driven by the Conservatives and the Brexit debate.
An SNP landslide
The sustainable business sector will likely benefit from the SNP's plans to invest £2bn in Scotland's economy through the establishment of a Scottish National Investment Bank.
The SNP stand firm on the point that the UK must accelerate its action to meet Scotland's climate change targets of a 75% reduction in emissions by 2035, net zero carbon emissions no later than 2040 and net zero of all emissions by 2045. The renewables sector will have a key part to play and green finance will be required to help drive tackling climate change.
The SNP also hope to reduce VAT on energy efficient improvements in homes, and will require all new homes to use renewable or low carbon heat from 2024 providing an opportunity for sustainable project and real estate finance industry players to work in pursuit of these goals. The SNP aims to keep the UK aligned with EU environmental regulations despite Brexit which will provide continuity for green businesses working in the UK and across the EU.
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