With the majority of consumers and businesses already supportive of the Net Zero effort, the association said the main obstacle to increasing the uptake of green goods is cost.
The Finance & Leasing Association (FLA) has launched its manifesto, Making Green Finance Mainstream, which highlights the need for a Green Finance Wholesale Guarantee to help scale up green lending in support of Net Zero.
With the majority of consumers and businesses already supportive of the Net Zero effort, the association said the main obstacle to increasing the uptake of green goods is cost.
The FLA added that lender involvement is therefore crucial to the government’s plans, but that the price of green lending needs to be to affordable, competitive and comparable to non-green options.
The FLA has therefore recommending a Green Finance Wholesale Guarantee that would run from 2022 to 2026, providing cover for funders of both consumer and business lenders on a portfolio basis.
If operated on the same semi-commercial basis as the British Business Bank’s ENABLE scheme, with a similarly low rate of non-performing portfolios, the Green Finance Wholesale Guarantee programme could even generate a modest profit for government.
Stephen Haddrill, director of the FLA, said: “While the vast majority of consumers and businesses are fully behind the government’s green agenda, monthly budgets and bottom lines will make pragmatists of even the most environmentally aware.
“The success or failure of the government’s Net Zero ambitions will depend on the availability of finance that is affordable, competitive and comparable to non-green options.
"That in turn makes the Green Finance Wholesale Guarantee a vital requirement to scale up green lending.”
