Green Finance is Collapsing

So why has Ed Miliband just announced plans for the UK to become the "sustainable finance capital of the world"?

This week, the Government revealed Ed Miliband’s plans for the UK to become the "sustainable finance capital of the world". These plans will “support banks and large companies in developing climate transition plans”, “help unlock billions in clean energy investment” and “grow the economy”. But like most schemes of this kind, they are long on hyperbole, short on detail, and show no evidence of thought or reflection on the growing evidence of policy failure.

“We're determined to make the UK the sustainable finance capital of the world”, said Ed Miliband on X. “Our plans will transform our leading financial services sector into a global hub for green investment.” But I might just as well announce my plans to become a rock-star-super-model-Olympic-swimmer-and-successor-to-Einstein.

“Transition planning means businesses set out a roadmap that outlines how they intend to adapt and transform their operations, strategies and business models to align with their climate goals,” explains the Government’s announcement. So the “Government’s commitment to secure Britain’s position as the sustainable finance capital of the world” requires companies make that commitment, i.e., the plan is to get companies to make plans. This requires “a voluntary registration regime for the providers of assurance of sustainability reporting”, “new UK Sustainability Reporting Standards”. It’s hard to see anyone jumping for joy about such “opportunities”, but no doubt, buried beneath the jargon, hype and waffle, there are promises of returns, at the consumer’s and taxpayer’s expense. But that’s beside the point.

There is nothing new here, except perhaps a modification of ESG (Environmental, Social and Governance) standards and reporting, which previous governments were no less committed to. Companies, especially larger firms, have been increasingly required by UK Regulations to submit statements about their performances with respect to ESG alongside their statutory financial statements. The logic of this development is that climate change creates ‘risks’ for investors that are equivalent to other financial risks, which companies must disclose to investors like any other liability, such as debt. The hope was that, by requiring such 'disclosures' and 'reporting', companies would align with the green agenda by in turn making their own operations more 'sustainable', including requiring it of their own supply chains and their customers, even if legislation didn’t require it explicitly.

The Pope of ESG, who oversaw Britain’s lead in this greening of the financial system was (and perhaps still is) now Canadian Prime Minister, former governor of the Bank of England, Mark Carney. Carney was appointed to head the BoE by a Conservative government, and was later given the role of Finance Adviser for 2021's COP26 by then Prime Minister Boris Johnson. At the BoE, Carney had driven the cause of ESG among the world’s central bankers and financial regulators, using his stewardship of the G20’s Financial Stability Board (FSB). As FSB chair, Carney established a Taskforce on Climate-Related Financial Disclosures (TCFD) to advise on mandatory climate-risk reporting requirements, and appointed green billionaire Michael Bloomberg to chair it. Bloomberg and other philanthropists, meanwhile, spent billions of dollars establishing an ecosystem of shareholder activist and other ersatz 'civil society' organisations to promote the cause of ESG and lobbying politicians to make ESG reporting mandatory.

But the failure of the mission has been spectacular. At COP26, Carney officially inaugurated the Glasgow Financial Alliance for Net Zero (GFANZ) – an umbrella organisation, managed by Bloomberg’s offices, which included sub-sector-specific organisations representing alliances of similar kinds. Under GFANZ, the Net Zero Banking Alliance (NZBA) would unite the world’s banks in purpose. The Net Zero Insurance Alliance (NZIA) would unite insurance companies. There would be a Net Zero Asset Owners Alliance, and so on – a blizzard of green acronyms. At the conference, and following a speech by Carney, in which he outlined the “plumbing” of this new global financial system, then UK Chancellor of the Exchequer, Rishi Sunak took to the stage to declare that financial institutions with $130 trillion of assets under management had joined the alliance of alliances.

$130 trillion! Net Zero was surely in the bag! That sum of money, were it liquid, would be equivalent to about $16,250 per person on the planet.

But it was a sleight-of-hand. And ESG began to raise eyebrows.

In the USA, states began to ask what good this form of eco-dirigiste imposition over the economy would be doing for their companies and populations. Anti-trust suits were filed against 'cartels' of climate investors – many of which had likely come into being after the shareholder activism of Sunak’s earlier employer, billionaire hedge fund manager Christopher Hohn. And within months of its founding, financial institutions began quitting GFANZ and its associated alliances. In January, the Guardian reported that “JP Morgan became the sixth major US bank to quit the Net Zero Banking Alliance” in the preceding two months. Banks were “turn[ing] away from the climate-related commitments they made in the optimistic years after the Paris agreement”. GFANZ was as good as dead.

But what about ESG investing itself?

According to Morningstar, the first quarter of 2025 saw 'Investors Turn Away from ESG Funds in Record Numbers' – the worst on record since ESG fund flows were first calculated in 2018. Citing an “exodus” of US firms over ten quarters, and now including European firms, ESG investment funds are now shrinking. However, Europe remains by far the centre of ESG investing, accounting for nearly all of the $3 trillion currently invested in such funds.

That might sound like a lot of money. But it’s a far cry from the $130 trillion that Carney and Sunak crowed about at COP26, just four years ago. And though Miliband might talk a good game about “unlock[ing] billions in clean energy investment”, he should reflect more carefully on the figures. $3 trillion is just £2.16 trillion, and the National Energy System Operator (NESO), which is now under Miliband’s control since its purchase last year from National Grid, estimated in 2020 that Net Zero by 2050 is going to cost £3 trillion – £100 billion per year from then until 2050.

That is to say that all the money in the world that has currently expressed an interest in funding green schemes is nearly a third less than is required to deliver Britain’s Net Zero agenda. And the funds are shrinking. ESG’s moment has passed.

As European governments cool their own implementations of the EU’s doomed Green Deal, perhaps Britain could go it alone to draw more of those dwindling funds towards support for the most expensive and undemocratic political project in our history. Indeed, Ed Miliband’s psychopathic vanity is wholly invested in the notion that British climate unilateralism will so impress other nations that they will follow in his wake. ESG funds are draining, but he thinks he can reverse the flow – to stand against the tide and, by sheer force of state power, send the currents into reverse, like some kind of King Knut, but without the sense of irony.

What is needed here, to protect people’s savings, pensions and investments, is a movement of shareholder activists to act in the opposite direction. Rachel Reeves has already indicated that pension 'megafunds' will be created to boost economic growth. Last month, the BBC reported Reeves’s claim that her reforms will “mean better returns for workers and billions more invested in clean energy and high-growth businesses", likely meaning that private wealth is to be directed – if not raided – to secure the Government’s policy agendas. On the promises of billpayer and taxpayer-funded subsidy schemes (which are already proven failures, and which have already caused economic chaos), some investment managers are going to be persuaded. But if ESG standards required companies to acknowledge the risks of climate change, then the risks of climate policy failure ought to be disclosed too. In contrast to just a few years ago, voters are very clearly signalling in polls that an alternative to the endless climate shakedown is required. And current polling favourites Reform has indicated that it intends to reclaim the funds taken from households by green extortion.

Miliband is very obviously trying to sustain the Green Blob’s major organ. The green agenda always was about money. And that is why it drew the interests of so many billionaires from the financial sector – Micheal Bloomberg, Christopher Hohn, Jeremy Grantham, for example. Greening the financial system was, in their view, a way to enforce the 'transition' without requiring legislation as such – decarbonisation could just be made a requirement of contracts. But such control over regulations and the terms on which business relate to each other and customers turned 'philanthropists' into unaccountable governments and enabled them to operate in their own interests.

For Miliband, the restructuring of Britain’s economy and 'transition' of the hoi polloi into eco-serfs, forever in debt to green financial institutions, is a price worth paying. His payoff is a Britain covered in solar and wind farms, and his failed Prime Ministerial bid redeemed by a world-leading political project to save the planet. His promises of “lower bills”, “energy security” and “green jobs” will disappear sooner than the Chinese-made wind turbines will rust. And CfD subsidy contracts will, with each rotation of those turbine’s blades, drain ever more money from the household to the companies that financed them for decades into the future. Britain will not be a 'Clean Energy Superpower' and even if the country does become the “sustainable finance capital of the world”, it will be by virtue of the rest of the world having no interest in such a nonsense. Miliband will be king of a squalid pile of dirt, all of its wealth surrendered to foreign private equity firms and questionable eco-philanthropists.