London has again been named the world’s number one centre for green finance, according to a survey.
The capital scored well across think tank Z/Yen’s 11th Global Green Finance Index (GGFI), allowing it to retain the world’s top spot for the fourth year running.
London outdid all other cities in terms of its talent pool, built infrastructure and quality of life, although New York just pipped it to the post in terms of its regulatory environment.
London’s professional services firms and policy environment were also seen to be the most supportive of anywhere in the world for green finance, but New York’s capital markets were thought to be more liquid.
Responding to a Z/Yen survey for the research, financial professionals around the world said UK government initiatives contributed to the capital’s success citing, for example, the government-backed UK Green Finance Institute.
The Institute convenes people across the financial sector to identify barriers to green investment
The capital overtook Amsterdam to take first place in the eighth GGFI back in 2021, likely benefitting from the UK hosting COP 26. It has been ranked first ever since.
Paris and Frankfurt, often seen as continental challengers to the capital’s dominance in finance more generally, came in at 17 and 36 respectively, behind cities like Sydney at 13, Edinburgh ranked 14 and Oslo which came in at 16.
New York was named the world’s second green financial centre, followed by Stockholm, Geneva, Luxembourg, Amsterdam, Los Angeles, Copenhagen, Washington D.C. and San Francisco.
Pacific financial centres fare relatively poorly in green finance. Singapore, Hong Kong and Shanghai, respectively ranked third, fourth and seventh for finance generally, came in at 37 and 20 when it came to green finance.
Encouragingly, survey respondents were bullish on London’s future in green finance. 86 per cent thought London would improve in the coming years, ahead of New York (84 per cent) and around Los Angeles and Amsterdam (both 87 per cent).
Z/Yen Group looked at 150 indicators, including indices on cities’ infrastructure and ease of doing business, and surveyed 633 financial professionals to compile the GGFI.
Professor Michaeil Mainelli, chairman of Z/Yen Group, said the findings mattered because of policymakers’ increased use of carbon markets to fight climate change.
The Kyoto Protocol, agreed in 1997, first established tradable carbon credits for countries as whole but they are increasingly being applied to individual goods in the real economy.
“It may have been a slow quarter century burn, but three-quarters of those responding to GGFI 11 expect 30 per cent or more of greenhouse gas emissions to be covered by carbon pricing by 2030, up from 21 per cent at the end of 2021 and 15 per cent in 2020”, he said.