UK Export Finance (UKEF), the UK’s Export Credit Agency, has unveiled 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.
UKEF is reported to have a current capacity of £50 billion to support UK exports through loans, insurance and guarantees, issuing £12.3 billion of financial support to businesses last year. This capacity will be entirely carbon neutral by 2050 on a net basis.
Anne-Marie Trevelyan, International Trade Secretary, commented: “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.”
UKEF’s Climate Change Strategy is based on five pillars that are set to help UK exporters prepare for a net zero world.
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
- lead internationally, encouraging others to follow their lead and set ambitious climate targets
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.
The ‘UK Export Finance Climate Change Strategy 2021 to 2024’ is available to read on the UK Government website.