London has once again been named the world’s top centre for green finance, according to a new survey, as New York dropped from second place.
The latest edition of Z/Yen’s biannual Global Green Finance index, ranking 96 locations, showed London clinched first place for the fifth time in a row since October 2021.
Meanwhile, Switzerland’s Geneva and Zurich overtook New York to take second and third place respectively.
Every centre’s rating in the index, out of 1,000 points, rose from the previous edition last October, while their average score rose 4.21 per cent, suggesting strong confidence in the development of green finance worldwide.
The gap between centres at the top of the index continued to narrow over the six months, with just 13 points separating the top 10 locations, compared with 20 points in October.
Western Europe still dominated the top 10, with five of the spots, compared to US centres taking three. Singapore was the only Asia/Pacific centre in this group.
London muscled out all its European rivals despite gloomy forecasts predicting Brexit would lead to a watering down of standards in the UK’s financial services sector.
The UK government unveiled a new Green Finance Strategy last March, announcing a widespread review of policies and regulations as it seeks to channel investment toward the green economy.
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.
Z/Yen said survey respondents rated energy-efficient investment, disinvestment from fossil fuels and green insurance as the areas of green finance with the most impact.
Other major drivers of green finance were found to be risk management frameworks, international initiatives and renewables.
Lord Mayor of the City of London and Z/Yen chair Michael Mainelli said: “Competition among leading financial centres in green finance is healthy. Gaps are closing as competition intensifies. It is great to see Montreal joining the top 10, another sign that green finance has spread from Europe worldwide.
“Looking forward, we expect to see progress on adaptation finance through continuing international cooperation, and new products particularly from the insurance and public debt markets.”
The index was compiled using 129 factors provided by third parties, including the World Bank, OECD and the United Nations, as well as 5,350 assessments provided by 890 respondents through an online questionnaire.