UK’s Green Leadership Under Threat, as Two Thirds of UK Energy Companies Consider Moving Investments Abroad

Liza Hartley
Liza Hartley 26th February 2024

London, 26th February 2024 – The UK Sustainable Investment and Finance Association (UKSIF), which brings together 300+ members managing over £19 trillion in global assets under management (AUM), has today released a report showing that 63% of UK energy companies have moved, or plan to move, investments out of the UK to a market more supportive of their sustainability goals. Furthermore, failing to implement new favourable policies could see the UK fail to benefit from a potential £115 billion of investment which is waiting to be unlocked for the UK energy sector.

The UKSIF Financing the Future: Energy Report is the first in a four-part series of research and policy papers calling for a series of practical and cost-effective policy reforms required to unlock greater investment for the UK’s highest carbon-emitting sectors and fulfil the UK’s true potential for sustainable economic growth.

As part of the research, UKSIF polled 100 business decision makers across the UK energy sector, representing £700bn in turnover, on their views about the current opportunities and challenges of decarbonising the UK energy system. Nearly nine in ten (87%) of UK energy businesses agreed that changes to UK policy are essential to make the UK an attractive investment location for green energy.  Moreover, 81% of large UK energy companies agree that the UK is falling behind other countries in the race to become the most investible market for low-carbon energy.

Within the report, UKSIF has identified three key measures required to facilitate greater investment and faster delivery of the UK’s future energy infrastructure, including:

  1. Overhaul planning rules to remove obstacles and reduce the time taken to bring large energy projects online
    • Streamlining the consenting process and shortening decision timelines could lead to 40% of energy companies increasing their investment in sustainable energy in the UK.
  2. Ensure there is adequate grid capacity to reduce connection times
    • Enabling the regulator to permit greater private sector investment will help rapidly build out the grid and associated infrastructure, allowing a greater number of low carbon projects to be invested in and connected.
  3. Reform energy pricing mechanisms to incentivise long-term investment in UK low carbon power capacity, including the Contracts for Difference (CfD) auction process to better support UK supply chain investment
    • Reforming the parameters of CfD auctions will not only boost investment into the UK, but also ensure that renewable energy supply chains are scaled up significantly – as will be required – to meet renewable deployment targets in the late 2020s and 2030s.


James Alexander, CEO at UKSIF comments: “An international race is underway between countries to become the most investible market for green energy and, currently, the UK is taking its leading position for granted. Multiple decades of arcane and archaic planning rules are putting the UK energy transition in great jeopardy. This report highlights the abundance of private capital that is waiting to be deployed to close the funding gap and help accelerate the UK’s energy transition, with companies clearly showing that they are willing to take this investment elsewhere if policy does not evolve.

“We are calling for practical and cost-effective measures that will advance the transition to a green economy and bring direct benefits to both consumers and the UK economy. Not only do we see no excuses not to accelerate these, failure to do so limits the UK’s growth potential, will continue to cause costs to consumers and threatens the UK’s position as a world leader in green finance and the undisputed financier of the net zero transition.”

Read the full press release at the link below:

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