Mind the Gap: NZBA Banking Commitments and UK Policy Gap Analysis

As part of the GFANZ and NZBA structure, country chapters will provide the bridge between the high-level commitments that banks have made and implementation on the ground, with a particular focus on ensuring that there is an enabling regulatory and legislative environment.

As the UK Country Chapter of the UN Convened Net Zero Baking Alliance, Bankers for Net Zero will undertake initial research to identify areas that require most attention if the UK is to meet its 2030/2035 targets, to create a shared understanding of where current policies are inadequate to deliver on future UK carbon budgets and where banks can play a role in closing the gap. This gap analysis report was launched in July 2022 and will be updated with annual reviews to reflect current changes to commitments and actions.

Our Specific Aims:

  • Work with industry to understand why certain areas are falling behind

  • Encourage Government and industry to take action to ensure all areas meet net zero targets

Mind the Gap: NZBA Banking Commitments and UK Policy Gap Analysis

As part of the GFANZ and NZBA structure, country chapters will provide the bridge between the high-level commitments that banks have made and implementation on the ground, with a particular focus on ensuring that there is an enabling regulatory and legislative environment.

As the UK Country Chapter of the UN Convened Net Zero Banking Alliance, Bankers for Net Zero will undertake initial research to identify areas that require most attention if the UK is to meet its 2030/2035 targets, to create a shared understanding of where current policies are inadequate to deliver on future UK carbon budgets and where banks can play a role in closing the gap. This gap analysis report will launch in July.

Our Specific Aims:

  • Produce a report in July

  • Bi-annual reviews to reflect ongoing changes to commitments and actions

  • Work with industry to understand why certain areas are falling behind

  • Encourage Government and industry to take action to ensure all areas meet net zero targets

The Retrofit Revolution

Greening the built environment is one of the biggest economic, social and environmental opportunities for the UK over the next three decades. It will create jobs, stimulate economic growth, reduce fuel poverty, improve health and wellbeing, not to mention helping to eliminate the 40% of UK greenhouse gas emissions that are produced by the built environment sector (UK Green Building Council).

B4NZ recommends that Government should roll out an ambitious programme of deep retrofits in the social housing sector, bring forward implementation of the Future Homes Standard and Future Buildings Standard, and set out a clear pathway for how energy efficiency standards that will ratchet up all the way to net zero compliant over the next 20-30 years.

In order to turn these recommendations into action, B4NZ will continue working with industry and academia to understand the challenges at hand, and liaise with Parliamentarians, regulators and Government to relay these challenges and push for feasible yet effective policy options.

To date, we have published two policy reports, The Retrofit Conundrum and Mind the Delivery Gap, that set out clear policy recommendations to drive greater public-private collaboration and unlock private finance to support household retrofitting.

The Retrofit Revolution

Greening the built environment is one of the biggest economic, social and environmental opportunities for the UK over the next three decades. It will create jobs, stimulate economic growth, reduce fuel poverty, improve health and wellbeing, not to mention helping to eliminate the 40% of UK greenhouse gas emissions that are produced by the built environment sector (UK Green Building Council).

Retrofitting the built environment is essential for the UK to achieve net zero emissions by 2050. Failure to take transformative action today will mean that it is the households, businesses and governments of the 2030s and 2040s that benefit disproportionately, while today’s citizens get a raw deal of high energy costs, high pollution and low growth.

B4NZ recommends that Government should roll out an ambitious programme of deep retrofits in the social housing sector, bring forward implementation of the Future Homes Standard and Future Buildings Standard, and set out a clear pathway for how energy efficiency standards that will ratchet up all the way to net zero compliant over the next 20-30 years.

In order to turn these recommendations into action, B4NZ will continue working with industry and academia to understand the challenges at hand, and liaise with Parliamentarians, regulators and Government to relay these challenges and push for feasible yet effective policy options.

Our Specific Aims

  • Work with industry to understand the current demonstrator projects across the UK

  • Map the trajectory of current projects against targets

  • Conduct a comparison between devolved nations

Mainstreaming Net Zero: Mobilising SMEs for Climate Action

The UK has 6 million small- and medium-sized enterprises (SMEs) – businesses with fewer than 250 employees. 99% of all UK businesses are SMEs, and the vast majority of those are micro-enterprises with fewer than 10 employees. Collectively, SMEs are responsible for 52% of the turnover of UK plc and they employ more than 16.5 million people – a quarter of the total population. SMEs need to be supported in their translation to net zero, otherwise we risk leaving a core component of our economy behind as we turn green.

SMEs must have the financial support and expertise necessary to help them achieve a just transition. To ensure SMEs are not left behind or forgotten in this transition, B4NZ will continue to work with industry and academia to understand the current barriers in place for SMEs, and liaise with Parliamentarians, regulators and Government to relay these challenges and push for feasible yet effective policy options, to create a supportive business environment for all SMEs transitioning to net zero emissions.

We are embarking on a programme of work, Perseus, to develop a pragmatic whole-of-market solutions to create rapidly scalable, low-effort, low-friction sustainability reporting. This will help unlock access to capital by starting to automate GHG reporting for every SME in the country. Through a collaborative programme, it will automate GHG reporting for SMEs to enable banks, financial institutions and related organisations to assist UK SMEs in the Race to Zero.

Mainstreaming Net Zero: Mobilising SMEs for Climate Action

The UK has 6 million small- and medium-sized enterprises (SMEs) – businesses with fewer than 250 employees. 99% of all UK businesses are SMEs, and the vast majority of those are micro-enterprises with fewer than 10 employees. Collectively, SMEs are responsible for 52% of the turnover of UK plc and they employ more than 16.5 million people – a quarter of the total population. SMEs need to be supported in their translation to net zero, otherwise we risk leaving a core component of our economy behind as we turn green.

SMEs must have the financial support and expertise necessary to help them achieve a just transition. To ensure SMEs are not left behind or forgotten in this transition, B4NZ will continue to work with industry and academia to understand the current barriers in place for SMEs, and liaise with Parliamentarians, regulators and Government to relay these challenges and push for feasible yet effective policy options, to create a supportive business environment for all SMEs transitioning to net zero emissions.

Our Specific Aims
  • The Smart Data Foundry at the University of Edinburgh to produce a scoping and research report

  • Determine a framework for measuring SME emissions and design a method to gather this information

  • Identify opportunities for signposting to verified and legitimate net zero information and Government schemes to be disseminated to SMEs via banking apps

Fertile Ground: Accelerating the Transition to Net Zero Agriculture

Agriculture is responsible for 11% of total greenhouse gas (GHG) emissions in the UK, despite only representing 0.5% of GDP. Concerningly, emissions from agriculture and land use have remained relatively stable since 2008, which is inconsistent with the UK Government’s Net Zero target. Accelerating the transition to low-emissions and nature-positive farming is essential if the UK is to meet its long-term climate and nature goals.

The Bankers for Net Zero Agriculture working group was established in December 2022 to develop specific recommendations for accelerating UK agriculture’s transition to net zero. The working group includes participants from the following banks and stakeholder organisations: Atom Bank, Gentle Farming, Handelsbanken, HSBC UK, Linking Environment And Farming (LEAF), the National Farmers’ Union (NFU), the Nature Friendly Farming Network (NFFN), Oxbury Bank Plc, Paragon Banking Group, Re:Pattern, the Soil Association and Triodos Bank UK.

The working group was facilitated by Volans, a think tank and advisory firm at the forefront of sustainability and innovation and co-founder of the Bankers for Net Zero initiative.

Our recommendations:
  • Incentivise peer-to-peer learning and knowledge exchange with government grants in
    support of national climate and nature goals.
  • Create a pre-competitive forum for banks, farmers and key players in the food value
    chain to come together and align on GHG measurement, reporting and standards.
  • Use public sector food procurement standards to create demand for low-emission
    farming in food supply chains.
  • Set out a clear plan and timeline for phasing down the use of fossil fuel-based
    agrichemicals.
  • Clarify how public finance will be used to attract and complement private finance.