ClientEarth released the report Towards the Green Investment Bank Act at Green Investment Bank (GIB), Legislation & Economic Recovery - an event chaired by Green Party MP Caroline Lucas in the UK House of Commons on 22 November 2011. Our report contains proposed legislative drafting of the key provisions for the legislation establishing the GIB. Speakers at the launch event included ClientEarth's Karla Hill and Dimitri Zenghelis of the London School of Economics/Stern Review.
Left to right: Caroline Lucas MP, Ed Matthew (Transform UK), Dimitri Zenghelis and Karla Hill
Investment of up to £1 trillion is needed by 2030 to upgrade, replace and de-carbonise the UK’s infrastructure. Up to 70% of this will be in green and low-carbon technologies. The Green Investment Bank is required to help deliver this investment. Analysis by Ernst and Young indicates that for the energy sector, only 10−20% of the capital required will be secured unless a Green Investment Bank is established to partner with the market to share the risks implicit in low-carbon energy investment. By unlocking private sector finance and pursuing a defined environmental mandate, the Green Investment Bank can achieve this at lowest cost to the taxpayer and can be a major catalyst for green growth and green jobs.
The UK government confirmed in May 2011 that the Green Investment Bank will be enshrined in legislation. This decision is to be warmly welcomed as legislation is absolutely essential to secure investor confidence in the independence and accountability of the institution. This investor confidence will in turn play a major role in enabling the Bank to maximise its potential to leverage private sector investment into the green economy, and support economic recovery and job creation at the scale and speed required.
This report draws on extensive legal and policy analysis. It finds that while some design features can be safely left to the company’s articles of association and governed by the Companies Act 2006, several other key aspects of the Bank’s design and governance framework clearly require enshrinement in statute.
There is a risk that the government could move forward with overly light-touch legislation. This would fail to galvanize key policy objectives and could undermine investor confidence. ClientEarth's draft legislation includes the essential provisions which must be maintained in the GIB legislation.
Together with Transform UK, ClientEarth calls for the creation of a real bank that will have the power to borrow and a state guarantee – to leverage the scale of finance necessary to meet environmental challenges and stimulate economic growth.
|Published||November 1, 2011|
|Found in||Rule of law|