Green Public Banks

Tackling climate change is at its heart an infrastructure investment challenge. In thirty years over $200 trillion of new investment must be channelled into innovative clean, resilient & distributed infrastructure including nature-based solutions. Risk aversion in the private sector means green investment needs to scale up multiple times especially in emerging economies where 80% of investment is needed.

In the aftermath of the 2008/9 financial crisis UK clean investment collapsed. Nick Mabey worked with Ingrid Holmes at Climate Change Capital to develop the concept of a public Green Investment Bank (GIB) to fill the investment gap needed to deliver UK climate goals.

The GIB was taken up by all Parties going into the 2010 UK elections. Nick served on the independent commission to design a GIB and E3G built a coalition of financial and non-financial actors to provide intensive support for the founding of the world’s first national Green Investment Bank in 2011; underpinned by £3 billion in public capital.

Although the UK unwisely privatised the GIB in 2017 it had sparked a wave of new national & sub-national green banks around the world with 27 established & 20 under consideration. E3G has worked on new green finance institutions in Mexico, Colombia & South Africa and provided green bank development advice across Europe and in China. Lessons from this work have been synthesised into a design guide.

Nick Mabey has continued to lead E3G’s work on driving “green” reforms to existing public banks which provide $2.1 trillion of investment annually. E3G publishes a regular performance assessment for the largest global & national banks.

In his role on the London Sustainable Development Commission, Nick Mabey helped develop designs for a new London “green bank” with a unique social & just transition focus. In 2021 the Mayor of London committed to establishing a finance facility based on this work. Meanwhile also in 2021 the UK established a National Infrastructure Bank with a net zero mandate, effectively recreating the original GIB.

COP 26 in Glasgow saw a welcome Leader’s level focus on building new financial platfroms to shift “trillions” of investment into sustainable infrastructure in developing countries. This will be impossible without the reform of international and national public banks to make them champions of green investment.