The Labour Party has published its Financing Growth Labour’s Plan for Financial Services report, which is the first stage in outlining Labour’s vision for the future of Britain’s financial services. 

The report, signed by Shadow Chancellor Rachel Reeves and Shadow Economic Secretary to the Treasury Tulip Siddiq, provides the vision for the economic sector based on six policy priorities: Deliver inclusive growth; Enhance international competitiveness; Reinforce consumer protection and financial inclusion; Lead the world in sustainable finance; Embrace innovation and fintech as the future of financial services; and Reinvigorate our capital markets. 

The plan says that Labour will adopt an “industrial strategy” across all economic policies, including financial services (FS). The party’s goal is to position the FS sector as the driving force behind economic growth in the UK. This involves creating a policy and regulatory environment that enables the sector to compete globally and attracts increased investment to the UK economy.  

According to the plan, one of Labour’s guiding principles to economic policy are to take a leading role in green finance and innovation on a global scale. The Report states that to secure the UK’s position as the world leader in green finance and capture over £1 trillion of the global green economy, it is imperative to establish a clear, credible, and transparent framework to provide investors with the certainty they need to invest in the UK. It is welcomed to see that the Labour party is not linking climate change to the cost-of-living crisis and acknowledges that long-term net zero policies play a crucial role in creating economic growth in the UK. 

UK’s global leadership undermined 

A point that the Review has made clear is that the UK is no longer a global leader on climate action due to the current Government’s inconsistent approach to net-zero policies. It mentions that Government’s actions, such as rolling back targets and neglecting the recommendations of its own Skidmore Review, have eroded incentives for decarbonization and impeded the execution of the Green Finance Strategy, which has hindered progress in the transition to a more sustainable future. It also claims that the delays in formulating the UK Green Taxonomy and the uncertainty surrounding the future of the Transition Plan Taskforce’s (TPT) work have left businesses in doubt about the UK’s dedication to achieving net zero, while our counterparts, including the US, the EU, and China, have made substantial strides in this regard.  

Strengthen policy and regulation 

It is welcomed to see the party’s commitment to the following regulations but there is room for more ambition in some regards. The Review includes:  

Transition Plans: Mandate financial institutions companies to publish their carbon footprint and adopt credible 1.5-C aligned transition plans. It does not mention applying transitions to plans to other companies than FTSE 100 and it does not mention whether these should be voluntary or mandatory. 

UK Green Taxonomy: Progress the development of the UK Green Taxonomy, guaranteeing its foundation on scientific principles, compatibility with global standards, and ease of use for businesses. However, the Report does not mention greenwashing nor stewardship, suggesting a potential oversight in evaluating the authenticity of environmental claims within the industry.  

Sustainable Disclosure Standards: Meet the UK’s obligation to adhere to the Sustainability Disclosure Requirements in alignment with the standards set by the International Sustainability Standards Board and the TPT Disclosure Framework. This commitment aims to provide businesses with the certainty necessary for compliance with global net-zero reporting standards. Additionally, the Report mentions that the Labour Government would continue the implementation of the disclosure framework and sectoral guidance developed by the TPT. It also states that the party will establish a clear timeframe for introducing both voluntary and mandatory transition planning and disclosure requirements for other entities, whether public or private. 

Tracking Financial Flows: Collaborate with the sector and data providers to assess a potential framework for monitoring green finance flows, aiming to improve the accessibility, uniformity, and reliability of sustainability-related data. 

Financing Nature: While there is not enough mention of nature and biodiversity in the review, it states that the party will examine the possibilities of finance related to nature by building upon the initiatives in voluntary carbon markets and public-private partnerships focused on natural capital 

Green Infrastructure Bonds: Request the FCA, PRA, and the Treasury to engage in consultations regarding the possibility of permitting banks and insurers to issue covered bonds secured against green infrastructure. 

Partnering with the private sector for green housing 

The Review emphasizes the pivotal role of financial institutions in supporting the greening of the housing stock and outlines the party’s intentions to collaborate with banks. This collaboration aims to expand affordable offerings for retrofitting work, encompassing insulation, heat pumps, and solar panels. Additionally, the Report explores the expansion of green mortgages, potentially providing a more cost-effective alternative. Access to green mortgages may be extended to homeowners completing retrofitting work, incorporating financing for retrofitting within offers for new homeowners. Taking inspiration from the US Property Assessed Clean Energy program, the proposal delves into property-linked financing where debt accrued for retrofitting is attached to the property rather than the owner. This strategy has the potential to attract significant investment, facilitating upfront funding for retrofitting while allowing property owners to make regular payments towards the loan, all while maintaining ownership of the property. 

An economic opportunity 

It is welcomed to see that despite the challenges, the Report mentions that the UK has a strategic advantage in boosting green financing. Labour’s dual objectives are to establish Britain as a clean energy superpower by 2030 and achieve the highest sustained growth in the G7 to empower the country to capitalize on the UK’s strengths to demonstrate the UK’s unwavering commitment to unlocking the full potential of the financial services sector in funding the green transition.  

Overall, the Plan itself does not contain much new in terms of updates or announcements, but it is very welcomed to see Labour’s commitment to certain policies and identify where the gaps for civil society action lie. Bankers for Net Zero are excited to continue our work with the Labour party to ensure climate commitments are backed by policy and regulation. 


Elena Pérez Celis,  

Head of Policy & Public Affairs