London has kept its title as the world’s top centre for green finance for a third year, according to an influential think tank, as New York falls further down the rankings.
The Z/Yen Global Green Finance Index, which ranks 97 locations, showed London remained in first place with a rating of 634 points. It has topped the biannual study since October 2021.
New York, which was toppled from second place in April, fell once again to fifth from fourth. Its rating dropped 16 points to 626.
Every centre in the top 20 saw its rating decrease over the half year, while just six locations gained points.
London’s rating slipped by 14 points. It was trailed by Zurich, Singapore and Geneva in the rankings.
The average rating of centres in the index ticked down 0.1 per cent from April, suggesting a slight drop in confidence in the development of green finance.
Harnessing private capital has been cast as crucial to ensuring countries hit net-zero targets due to governments having limited fiscal firepower to meet the cost of decarbonising their economies.
In a report last week, Barclays said the UK’s transition would likely require between £50bn and £60bn of capital investment each year through the late 2020s and 2030s.
Z/Yen said survey respondents rated energy-efficient investment, disinvestment from fossil fuels and green loans as the areas of green finance with most impact.
Major drivers of green finance were found to be policy and regulation, risk management frameworks and international initiatives.
“Competition among leading financial centres in green finance is intense – as shown by the
close ratings at the top of the GGFI,” said Mike Wardle, Z/Yen’s chief executive.
“The contribution of the insurance industry to response to the risks of climate change are a significant contribution to the global need for adaptation to the future.”
The index was compiled using 127 factors provided by third parties, including the World Bank, OECD and United Nations, as well as 4,747 assessments provided by 748 respondents through an online questionnaire.
Z/Yen’s report was co-authored by Lord Mayor of the City of London Michael Mainelli, who is the think tank’s chair.