Barclays is urging the new UK government to address public and private sector funding challenges and make the UK an attractive destination for green investment to achieve net-zero ambitions.
The Scaling growth-stage climate tech companies paper details the main obstacles to financing and government support for growth-stage climate tech companies and makes four recommendations to the new Labour government on how to address them.
These recommendations include providing direct public support for companies by addressing the multi-million-pound gap in public financing provision, particularly calling on the British Business Bank (BBB) or the UK Infrastructure Bank (UKIB) to launch a specific fund or work programme focused on climate tech.
Barclays also calls on the UKIB and BBB to expand financing mechanisms and maximise existing tools and mandates to improve the impact of public finance institutions, as well as improve organisational connection and collaboration between public financing institutions.
Finally, the bank is asking the government to consider the existing infrastructure of UK public finance institutions and evaluate whether they operate in most effective way to better serve up and coming green tech firms.
The need for more innovative and accessible financing options is clear: the report notes that 54% of surveyed respondents cited the availability of tech financing as directly impacting their company’s growth. Another key takeaway from the report is that firms often need support to navigate and access the landscape of public finance support, which the report described as “fragmented”.
Daniel Hanna, global head of sustainable finance at Barclays, said: “The UK is renowned for its innovation but there is a missing middle of capital holding back successfully scaling viable real economy ideas that can support the transition to net zero emerging from our institutions, entrepreneurs and universities. The National Wealth Fund presents an opportunity for the UK to fine-tune the UK’s public finance approach and help mobilise greater private capital.”
Public funding for green tech companies has become increasingly important as net-zero deadlines draw ever-closer.
In response, the new Labour government has launched the National Wealth Fund, a new funding body that will bring together the UKIB and BBB to facilitate investment into green bodies, a move that Barclays welcomed. A new task force chaired by the Green Finance Institute, has been formed to kickstart the work of the fund, and £7.3 billion has been made available to allow green investments to begin immediately.
In the private sector, specialised green funding has also been on the rise. Former energy minister Chris Skidmore recently announced the launch of Desmos Capital Partners, a private investment bank that will specifically support green tech companies wanting to secure £5 million or more of funding through series A and B rounds.
