‘Dragons' Den-style’ investment fund needed to achieve net zero, think tank says

25th August 2023


The UK needs a new public investment fund that provides green companies with finance in exchange for part ownership and a share of future profits, a think tank has suggested.

In a new report, the Institute for Public Policy Research (IPPR) argues that a ‘Dragons' Den-style’ fund is needed to boost investment in green technologies and achieve a net-zero economy.

The fund would provide finance for projects in green manufacturing, and would encourage private companies to make strategic investments that they would not otherwise make.

Initial funding for the investment fund itself would come from the Treasury, but it would be further supported by tax revenue generated by North Sea gas and oil.

Levies could also be imposed on share dividends from fossil fuel companies to support the investment fund, effectively diverting profits away from these firms and directing them towards a greener future economy.

Simone Gasperin, IPPR associate fellow, said that the new fund is “a policy proposal for our time”, and that the UK needs to “finance and coordinate strategic industrial policy projects” that deliver net zero, economic prosperity and inclusion.

He continued: “The cost of inaction on people’s livelihoods will be too high, while there are huge opportunities to be captured by the government co-investing with private companies.”

With this year marking the first anniversary of the US Inflation Reduction Act, and the EU responding with its own Green Deal Industrial Plan, the report warns that the UK risks “remaining on the starting blocks of the race to capture the green industries of tomorrow”.

It argues that a new, green industrial strategy is needed, with the government setting a clear direction for investment that will deliver prosperity, levelling up, reduced emissions and restoration of nature.

The IPPR calls on a new National Investment Fund investment fund to:

• Invest via equity finance in companies willing to expand green manufacturing activities and to decarbonise heavy industrial processes

• Support firms that are important to the UK’s future economy, and to grow the economy in more deprived regions, rather than aim for an immediate return on its investment

• Operate alongside existing funding schemes like the British Business Bank, the UK Infrastructure Bank and research grants from UKRI to “crowd in” additional private financing

• Encourage the companies in which it owns a stake to reinvest profits in growing the economy and in their own staff rather than paying out excessive dividends

• Operate under formal transparency and accountability rules, reporting annually to ministers and parliament on its value for money in terms of regional rebalancing, decarbonisation, job creation, boosting domestic supply chains, technology development and others.

George Dibb, head of the IPPR’s Centre for Economic Justice, said: “The US and EU are making major investments to secure the manufacturing and technologies of tomorrow, and it’s time the UK stepped up.

“Our proposal for a National Investment Fund is a practical way for the UK government to crowd-in private sector investment by strategically supporting companies and taking a share in their future success.”

Image credit: Shutterstock

Subscribe

Subscribe to IEMA's newsletters to receive timely articles, expert opinions, event announcements, and much more, directly in your inbox.


Transform articles

IEMA’s deputy CEO reflects on announcements and controversy at COP28

With the first week of COP28 drawing to a close, IEMA’s deputy CEO, Martin Baxter, reflects on some of the key announcements made so far, addresses the controversy surrounding the climate summit, and highlights what to look out for in the second week.

7th December 2023

Read more

Groundbreaking research warns that the models used by the finance sector to predict climate scenarios could easily sink our retirement pots… and the global economy. Huw Morris reports

30th November 2023

Read more

IEMA CEO Sarah Mukherjee MBE talks to food campaigner Henry Dimbleby MBE about improving the UK’s health, tackling poverty, shaping government policy and transforming agriculture

30th November 2023

Read more

A thought-provoking discussion on the future of zoos took place at the Royal Geographical Society in London last night, featuring a star-studded panel of conservation experts.

30th November 2023

Read more

Individual action or systems change? Which is the best route to net zero? Sophia Mwema weighs up the options

30th November 2023

Read more

The Labour Party’s climate policy team took part in a panel discussion with IEMA representatives at Westminster this morning, outlining what they plan to do should they win the next general election.

29th November 2023

Read more

Chancellor Jeremy Hunt unveiled the “biggest permanent tax cut in modern British history” in his autumn statement today, as well as significant investment for the net-zero transition.

22nd November 2023

Read more

Media enquires

Looking for an expert to speak at an event or comment on an item in the news?

Find an expert

IEMA Cookie Notice

Clicking the ‘Accept all’ button means you are accepting analytics and third-party cookies. Our website uses necessary cookies which are required in order to make our website work. In addition to these, we use analytics and third-party cookies to optimise site functionality and give you the best possible experience. To control which cookies are set, click ‘Settings’. To learn more about cookies, how we use them on our website and how to change your cookie settings please view our cookie policy.

Manage cookie settings

Our use of cookies

You can learn more detailed information in our cookie policy.

Some cookies are essential, but non-essential cookies help us to improve the experience on our site by providing insights into how the site is being used. To maintain privacy management, this relies on cookie identifiers. Resetting or deleting your browser cookies will reset these preferences.

Essential cookies

These are cookies that are required for the operation of our website. They include, for example, cookies that enable you to log into secure areas of our website.

Analytics cookies

These cookies allow us to recognise and count the number of visitors to our website and to see how visitors move around our website when they are using it. This helps us to improve the way our website works.

Advertising cookies

These cookies allow us to tailor advertising to you based on your interests. If you do not accept these cookies, you will still see adverts, but these will be more generic.

Save and close