The London Stock Exchange has published its 2022 report on the Green Economy Mark which highlights the increasing prominence of sustainable finance in UK capital markets.
What is the Green Economy Mark?
Main Market and AIM companies (and funds) providing green products and services which achieve net positive environmental objectives can be accredited with this mark by the London Stock Exchange. This requires classification of revenues using a FTSE Russell taxonomy called the Green Revenues Classification System (GRCS), recently updated (in 2022).
Which issuers have been accredited with the Green Economy Mark?
The report states that, in total, there are 108 holders of the mark, with a combined market capitalisation of £156 billion.
While this only represents 5% of all London listed companies, as a sector this is the fourth largest in terms of capital-raising since 2020.
Prominent sectors within the cohort include financials, industrials, utilities and green investment funds.
Interestingly, the constituent sector with the most issuers is green investment funds (defined as funds applying ESG criteria) which make up one third of the overall cohort. The report notes that the total market capitalisation of such funds - which provide exposure to wind, solar, energy storage and other sustainable infrastructure - has grown by 76 per cent in the past two years.
The Green Economy Mark provides an important signpost for investors looking for exposure to sustainable investments and raises the profile of companies looking to attract such investment.
How can we help?
At Burges Salmon, our sustainable finance lawyers work daily with clients, including many issuers accredited with the Green Economy Mark, across a range of practice areas. Unusually, our expertise in financial regulation, corporate, banking and private wealth is supported by our market-leading environment and climate change practice and legal specialists in social and governance risks, allowing us to deliver a comprehensive and seamless service to our clients.
The global green economy is large, diversified and expanding. The rising tide of sustainability-focused investment means that capital is flowing every more strongly towards the green economy and low-carbon transition. Globally, it has almost doubled its share of the global investable market between 2009 and 2021.