Financial services and net-zero: seizing the opportunity

Abstract

A high share of “green jobs” are – and will be – in the professional services sector. New estimates presented here show that about 730,000 workers in professional, scientific, and technical services activities are in green jobs, as well as 200,000 workers in the finance and insurance sector. Combined, these industries currently account for about a fifth of all green jobs on our definition. • These industries also have a greater share of the workforce in green jobs than the economy average. The latest ONS data show 27% of professional, scientific, and technical services workers in green jobs and 19% of financial services workers, compared with a UK-wide figure of 16%. While the financial services sector was broadly in line with the economy average share of green jobs in 2009, it is now ahead of the average. • Net zero finance has the potential to become one of the UK’s most successful green exports. London is currently rated number one globally for the quality and depth of its green finance offerings, and low-carbon finance is expected to grow faster than all other low-carbon sub-sectors of the economy. • Financial services will be pivotal in providing other sectors of the economy with the capital needed to support green investments – mobilising private wealth, including pension wealth, to support these projects. While around £800bn worth of UK pensions schemes are working aligned with net zero , most pension schemes (70%), worth £2 trillion, are yet to make net zero commitments and deploy capital in projects net zero-related – suggesting significant potential waiting to be untapped through a combination of government policy and financial services innovation. • Financial innovations are helping organisations – and countries – deliver on and commit to net zero. This includes through relatively new sustainability-linked bonds, where bond issuers face a financial penalty if they fail to meet sustainability targets. March 2022 saw Chile issue the world's first sovereign sustainability-linked bond, which is listed on the London Stock Exchange’s International Securities Market and Sustainable Bond Market. Financial services and net zero: Seizing the opportunity BRIEFING PAPER May 2022