3Ci’s Net Zero Investment Taskforce, Comprising Finance Industry Leaders, launch a New Report into ‘Net Zero Neighbourhoods’ at the House of Lords.
Report finds support for large-scale private sector investment in Net-Zero Neighbourhoods.

19.03.24, LONDON, 3Ci – The Cities Commission for Climate Investment – has today published the initial findings and recommendations of its Net Zero Investment Taskforce. The report, titled ‘From Challenge to Opportunity: Unlocking a UK-wide Net Zero Investment Dividend’, was unveiled at an event in the House of Lords.

The Taskforce, comprising a diverse array of stakeholders from banking, insurance, pensions, venture capital, and ESG investment sectors, was convened to examine 3Ci’s innovative financing model for Net Zero Neighbourhoods, with a primary focus on unlocking funding for housing retrofit initiatives.

The Net Zero Neighbourhoods concept takes a multi asset approach to neighbourhood decarbonisation operating across domestic and commercial property retrofit; renewable energy; transport; and waste. The model uses a share of returns from high-yield assets, like energy, to pump-prime low-performing ones, like retrofit and waste, potentially captured in a single financial vehicle. The model aims to reduce the need for the scale of public subsidy required for retrofit whilst delivering interventions at no additional upfront cost to the homeowner or tenant – a potential game-changer.

The Taskforce highlighted that strategic public investment can leverage private finance. They suggest further consideration should be given to integrating existing and future public investment with private finance, including grant funding. From an investor perspective, major patient investors like pension and insurance companies, whose capital is in some ways most suited to retrofit, are attracted to very large-scale projects, the likes of which most current schemes cannot achieve. Creating scale across multiple programmes and geographies could unlock this capital.

The much sought-after solution to retrofit financing of crowding-in higher levels of private investment could therefore be realised through the ‘Net Zero Neighbourhoods’ model. Investors agreed that local authorities must play a central role in Net Zero Neighbourhoods by linking to area regeneration plans and services, supporting local jobs and economic growth.

Catherine McGuinness CBE, Chair of the 3Ci Net Zero Investment Taskforce and Non-Executive Director at Connected Places Catapult, said:

“Our findings reaffirm that decarbonising neighbourhoods at scale is not straightforward. Whilst our aim may be to retrofit homes, we are also trying to retrofit a financial system and its models to a purpose for which they were not created. A rapid evolution is required, creating an investment ecosystem that will help the market to adapt and new models to emerge.” 

Prof Greg Clark CBE, Chair of 3Ci and Connected places Catapult said:

“3Ci has a vital mission to enable the urban investment required in delivering the UK’s ambitious net zero commitment, city by city, and neighbourhood by neighbourhood. I am grateful to Catherine and the members of this taskforce for taking such a diligent view of the current opportunities and challenges to invest in retrofit at scale, and how we can address them.”   

The Taskforce’s recommendations include the following:
Activate Retrofit Demonstrators as a top priority: a series of demonstrators are needed to address the challenges highlighted by this Taskforce, considering how they can also enable a Just Transition through financing models and identify the key project elements/players that need to be on board.

Convene a UK-wide conversation, starting with a Net Zero Investment Summit: with a commitment to a structured 2–3-year dialogue, steered by a collective of place leadership, investors and politicians from the Devolved Administrations as well as the UK government, alongside the many agencies delivering excellent work in this space to cohere findings and efforts.

A stronger enabling environment should be built for net zero investment, including further clarity of national intent for local net zero policy to establish market confidence.  For example, delivery cannot happen without a stronger supply chain, which relies on such confidence.

Taskforce members:
Association of British Insurers
Investment Delivery Forum
City of London Corporation
Barclays
Big Society Capital
Building Societies Association

British Property Federation

British Private Equity & Venture Capital Association (BVCA)

HSBC

Impact Investing Institute

Institute of Chartered Accountants in England and Wales (ICAEW)

Legal & General (L&G)

Local Government Association (LGA)

Lloyds Banking Group

NatWest

Scottish National Investment Bank (SNIB)

United Kingdom Infrastructure Bank (UKIB)

UK Finance

-ENDS- Notes to editors Media contact: Alex Smith, PR and Marcomms Manager, Connected Places Catapult alex.smith@cp.catapult.org.uk +44 (0) 7741 195398 Any conclusions drawn in this report are those of 3Ci alone.  

About 3Ci

3Ci – Cities Commission for Climate Investment (formerly known as UKCCIC) – is a partnership between Connected Places Catapult, Core Cities UK, London Councils, Key Cities, Scottish Cities Alliance and supported by Department for Energy Security and Net Zero and the Local Government Association. Our aim is to ensure that urban investment plays a key role in delivering the UK’s ambitious net zero commitment, city by city and neighbourhood by neighbourhood. Our initiatives bring together business, finance and local communities to accelerate change through innovation that is fair to all. Alongside this, we are supporting local authorities to secure the necessary long-term finance to achieve net zero.   3ci.org.uk

About Connected Places Catapult

Connected Places Catapult is the UK’s innovation accelerator for cities, transport, and place leadership. We provide impartial ‘innovation as a service’ for public bodies, businesses, and infrastructure providers to catalyse step-change improvements in the way people live, work and travel.  We connect businesses and public sector leaders to cutting-edge research to spark innovation and grow new markets. We run technology demonstrators and SME accelerators to scale new solutions that drive growth, spread prosperity, and reduce carbon emissions. cp.catapult.org.uk