UK Export Finance (UKEF), the UK’s Export Credit Agency, has launched a new plan to go net zero by 2050, decarbonising its financial portfolio and increasing its support for green exports.
As part of its new Climate Change Strategy, the new target will require UKEF to increase its support for clean growth, renewables and climate adaptation exports while also improving its management of climate-related risks on its portfolio.
This news comes as UK Prime Minister Boris Johnson is set to tell fellow world leaders at the UN General Assembly that climate change and economic growth are not mutually exclusive trade-offs but are instead each vital for the success of the other.
UKEF’s commitment is another step the UK is taking to prevent global temperatures rising above 1.5C and to protect our planet and people from the intensifying impacts of climate change.
UKEF has a capacity of £50bn to support UK exports through loans, insurance and guarantees, issuing £12.3bn of financial support to businesses last year.
This capacity will be entirely carbon neutral by 2050 on a net basis.
To end its contribution to climate change UKEF will increase its support for green exports, reduce greenhouse gas emissions from its financial portfolio, improve understanding and mitigation of its climate-related financial risks, report against climate-related commitments, enhancing transparency and disclosure and lead internationally, encouraging others to follow UKEF’s lead and set ambitious climate targets.
In less than 50 days, the UK will host the crucial UN climate change conference COP26 in Glasgow. Financial institutions have a vital role to play in meeting global net zero commitments and UKEF is embracing its responsibility to tackle climate change.
International trade secretary Anne-Marie Trevelyan said: “This plan is among the most ambitious of any Export Credit Agency worldwide.
“It puts UK Export Finance squarely in support of green exports to tackle climate change, level up the country and help us recover from the pandemic.
“UKEF’s net zero pledge shows the UK’s climate leadership and is an encouragement for other countries to follow suit.
“Its world-leading financial products help British businesses capture billions of pounds worth of foreign deals, boost green exports and give hope that temperatures can be kept in check.”
To ensure it delivers on its pledge, UKEF is setting realistic interim milestones to decarbonise by 2050. Over the next four years, UKEF will provide more detail on emissions for its most carbon intensive projects, establish new climate change stress testing and increase its financing for green projects.
The department will then publish another strategy to detail progress on its path to net zero in 2025.