Prime Highlights:
The Transition Finance Council aims to establish the UK as a global leader in transition finance, facilitating an economy-wide shift to net-zero through high-integrity financial products and services.
The Council is a key recommendation from the Transition Finance Market Review published in October 2024, emphasizing the UK’s strengths in financial services.
Key Background:
The UK Government and the City of London Corporation have announced the appointment of the Rt Hon Lord Alok Sharma KCMG as Chair of the Transition Finance Council, alongside Irem Yerdelen, who will serve as Deputy Chair. This strategic initiative, co-launched on January 23, 2025, aims to position the UK as a global leader in transition finance—financial products and services that facilitate a comprehensive shift to a net-zero economy.
The Transition Finance Council stems from recommendations made in the Transition Finance Market Review, published in October 2024. Its mission is to leverage the UK’s existing strengths in financial services to create an optimal environment for raising and deploying high-integrity transition finance. The Council will consist of representatives from various sectors, including finance, government, regulators, and civil society.
The Council’s key responsibilities include:
1. Implementing the recommendations from the Transition Finance Market Review.
2. Building capacity for transition finance and engaging with stakeholders both domestically and internationally.
3. Convening working groups to advance priority areas aligned with its objectives.
Chancellor of the Exchequer Rt Hon Rachel Reeves highlighted the government’s commitment to sustainable economic growth, emphasizing the importance of making the UK a global hub for green finance. She expressed confidence in Lord Sharma’s extensive experience to lead this initiative effectively. Lord Sharma brings a wealth of experience to his new role, having previously served as Secretary of State for Business, Energy and Industrial Strategy and as President of COP26. His leadership will be crucial in mobilizing capital towards decarbonization efforts in high-emission sectors.
Councillor Irem Yerdelen noted that ensuring access to financial products is vital for supporting an economy-wide transition to net zero. The Council will collaborate with partners to implement effective solutions. This appointment underscores the UK’s commitment to sustainable finance and its ambition to lead global efforts towards climate action.