Bright Blue, the independent think tank for liberal conservatism, has today published a new report entitled Toward Green Export Finance? Investigating the views of UK exporting firms towards UKEF. The report finds that there is overwhelming support among UK exporting firms for greater climate action by UK Export Finance (UKEF).
This analysis presents the results of polling of a reflective sample of 750 UK exporting firms on three broad areas: their general experiences and views of UKEF, in the case of exporting firms familiar with UKEF; the impact of COVID-19 on and their views on the support provided by UKEF; and, their views on how UKEF can support the transition to a net-zero world.
In December, the UK Government announced it would gradually phase out UKEF financing for fossil fuel projects overseas in 2021. But the analysis reveals a robust consensus among UK exporters that UKEF should introduce even more ambitious policies to combat climate change.
The report’s key findings are:
- A majority of UK exporters (70%) believe UKEF should be a leader globally among Export Credit Agencies (ECAs) on climate change
- Above and beyond supporting exporters to do business, the most popular additional government objective for UKEF among UK exporters is reducing climate change, with 82% stating that UKEF should prioritise the reduction of carbon emissions as a major goal. However, other government goals gain majority support: 79% of UK exporting firms believe UKEF should prioritise the protection of biodiversity and nature, 77% want UKEF to protect domestic employment and 72% want UKEF to support economically disadvantaged regions.
- There is strong majority support for a wide range of climate policy action by UKEF among UK exporting firms, especially: providing more generous financing terms to exporting firms that help to address climate change (73%); assisting exporting firms with preparation for and adaptation to climate-related risks (72%); and, prioritising job creation within the renewable energy sector over protecting employment in the oil and gas sectors (71%).
- A firm majority of UK exporting firms (83%) favour UKEF providing better financing terms for exports of low-carbon goods and services, with only a handful of exporting firms (2%) expressing opposition.
- A majority (50%) of all UK exporting firms favour the UK Government phasing out UKEF support for the development of fossil fuel projects in the next five years.
Andrew Leming, Researcher at Bright Blue and report author, commented:
“While the Government’s decision to phase out financing for fossil fuels at UK Export Finance (UKEF) is a massive step forward, the effort to reform UKEF must not stop there. There is a strong mandate from UK exporters for UKEF to go much further – providing better financing terms for exporters of low-carbon goods and services, for example.
“Despite UKEF’s poor record on climate change policy to date, UK exporting firms want UKEF to play an important role in accelerating the climate transition, both within the UK and internationally. As we approach COP26, there is a chance for UKEF to recover its reputation and introduce climate change policies to make it a leader among international ECAs. The UK has a chance to pioneer and promote green export finance.”
Alexander Stafford MP, Member of the Business, Energy and Industrial Strategy Committee, commented:
“Bright Blue’s report reveals a strong mandate from UK exporters for UKEF to play a bigger role in the transition to net zero. As COP26 nears, UKEF will allow this country to establish ourselves as a leader in green export finance.”
Sam Hall, Director of the Conservative Environment Network, commented:
“It is really positive to see the huge appetite among exporters for reforming UK Export Finance to support climate action. Growing low-carbon exports is a very effective way for the UK to address climate change, by spreading the best, low-cost clean technologies around the world and supporting green jobs.”
