GovWire

The UKs Green Financing Programme raises financing from investors to fund green expenditures that tackle climate change, rebuild natural ecosystems and support jobs in green sectors. Financing is raised through the issuance of green gilts via the Debt Management Office (DMO) and the sale of National Savings and Investments (NS&I) retail Green Savings Bonds.

The principles of the Programme are set out in the Green Financing Framework, published in June 2021. The Framework explains how proceeds from green gilts and NS&Is retail Green Savings Bonds will finance green expenditures to help tackle climate change, biodiversity loss and other environmental challenges, while creating green jobs across the UK. It also includes guidelines on the types of expenditures that can be included in the Programme, which are set out in six categories:

• Clean Transportation

• Renewable Energy

• Energy Efficiency

• Pollution Prevention and Control

• Living and Natural Resources

• Climate Change Adaptation

The Framework commits the government to annual allocation reporting and biennial reporting on environmental impacts and social co-benefits, ensuring transparency for retail and institutional investors as well as other interested parties.

The impact data demonstrate how these green expenditures are supporting the pathway to meet the UKs 2050 net zero target, protecting property and infrastructure from the effects of climate change, rebuilding natural ecosystems, stimulating the development of self-sustaining markets for low-carbon technologies, and supporting jobs in low-carbon and energy efficient sectors across the UK.

On 17 October 2024, HM Treasury published the third annual allocation report for the Programme. It presents allocation data from 39 expenditures financed by the Programme in financial year 2023-24.

In 2023-24, 10.9 billion was raised via green gilts and retail Green Savings Bonds. An additional 1.9 billion of green financing was raised but not allocated in 2022-23, for a total of 12.8 billion to be allocated to green expenditures in the 2023-24 allocation.

Of the 12.8 billion, a net 11.9 billion has been allocated to eligible green expenditures this year, including 10.8 billion allocated to green expenditures in 2023-24 and 1.0 billion of additional allocation to expenditures in 2022-23.

As of 1 October 2024, the Green Financing Programme has raised a total of 43.4 billion since September 2021, of which 41.6 billion has been raised via green gilt issuance and 1.8 billion has been raised via the sale of Green Savings Bonds.