The United Kingdom has committed to delivering a net zero economy by 2050. This involves improving energy efficiency, scaling up the use of renewable power and helping industry with decarbonisation roadmaps, including increased electrification and carbon capture, utilisation and storage. Finance is a critical enabler for the low-carbon economic transition.
Previously, some low-carbon solutions had risk-reward profiles that did not match the needs of investors or appetite of lenders. Now, more comprehensively capturing environmental, social and governance factors as well as financial ones during the risk assessment process provides a more accurate way of identifying the true risk-reward trade off.
This report sets out technology readiness levels for low-carbon solutions and presents a risk assessment from a bank lending perspective, of Carbon Capture and Storage, Heat Pumps and Solar PV. These three technologies are key enablers for delivering the net-zero climate ambition.
The report was written by researchers from Imperial College London for the HSBC Centre of Sustainable Finance.