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Katrina Sale: How green finance can help insulate more homes

Katrina Sale (Business Ambassador at CEN)

In 2020, almost half of the UK’s £9.4 trillion of assets were integrating environmental, social and governance considerations into their investment processes. Green financing has made a lot of progress in recent years as businesses and financial institutions have become more alert to both the social benefits and market desire for climate-conscious investments.

However, most UK residents are not yet feeling the benefit of these investments. In this blog, I’ll explore two key areas where green financing could directly help people - investing in land management to reduce the impact of climate change and investing in the housing market to reduce emissions and save consumers money on energy bills.

In 2019, the UK homes were responsible for an estimated 15% of our greenhouse gas emissions – making it one of our top five sources of emissions. There are approximately 25 million homes in England, of which 13.8 million are rated EPC D or below. In 2017, the government set a target for all fuel poor homes to be upgraded to EPC C by 2030 and as many as possible by 2035.

To reduce our housing emissions, we need to insulate our homes. Local authorities, landlords and homeowners should be encouraged and supported to install insulation, solar panels, eco-friendly boilers, electric car charging points, and energy efficient windows. All these measures will reduce the amount of energy, particularly gas, that we use. As bills skyrocket, reducing waste will be essential for keeping them as low as possible.

While a more efficient home means smaller bills and less waste, the upfront cost for installation can stop people from taking up these options. Green finance can play a crucial role in providing this upfront investment via products like loans. Nationwide is one of the first mortgage lenders to offer preferential rates for green homeowners. They have designated £1 billion for ultra-low interest rate loans to pay for environmental home improvements, enabling consumers to make the changes their home needs and ultimately save money.

Financiers can invest in new housing stock and mandate the use of sustainable materials. The government has introduced ambitious new regulations ensuring CO2 emissions from new-build homes must be around 30% lower than current standards from June 2022, setting a path towards building decarbonisation. But it will need to do more to support households before the next winter when increasing gas prices will hit energy bills hardest.

Another key area for finance is resilience. In 2021 over 76,000 incidents were reported to the Environment Agency, including flood, drought, fires, fish kills and pollution, and just a few weeks ago, the Met Office named three major storms in one week for the first time. The increasing frequency of these events caused by a warmer climate poses a severe threat to communities and businesses and requires a widespread effort to build weather resilience.

Investing in the agriculture sector could play a significant role in tackling this issue. The Agriculture Bill 2020 offers farmers financial rewards for land management that creates better air and water quality, thriving wildlife, soil health, or measures to reduce flooding and tackle the effects of climate change. These reforms lay the foundation for a new era of environmentally positive land management in the UK which makes the most of land that is less productive for growing food.

To further support farmers in this transition to decarbonise practices and make the most of the new sustainable opportunities, they may need upfront financial support. The Green Finance Institute has identified that the investment gap to secure key nature-related outcomes in the UK - such as biodiversity protection and restoration - is between £44 billion and £97 billion over the next ten years. To support financing for nature, including for farmers switching to more regenerative methods, they launched GFI Hive, an online knowledge resource designed to share the latest information and insights on how to increase private investment in and for UK nature.

The financial sector can already see the benefits of investing in climate action and is seizing the opportunity. Green finance will have a material impact on consumers, which will be all the more important as increasing gas prices squeeze budgets. Reaching net zero by 2050 will be impossible without private sector finance.


Views expressed in this blog are those of the author, not necessarily those of the Conservative Environment Network. If you are a CEN supporter, councillor, or parliamentarian and would like to write for the CEN blog, please email your idea to

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