Why government should introduce tax-free green savings

This is a guest post by Penny Shepherd, chief executive of the sustainable investment and finance association, UKSIF. UKSIF is coordinating National Ethical Investment Week, which runs from the 7-13th of November 2010.

When George Osbourne first proposed the idea of Green ISAs, he said that they would “engage the public in a new way in the issues around climate change and show them very clearly the economic benefits of green investment.”

As part of National Ethical Investment Week (NEIW), UKSIF has called on the government to introduce a Green ISA allowance at the next budget to enable the general public to make money from the low carbon transition.

The opportunity to invest in Green ISAs could encourage even more consumers to appreciate that green living can go much wider than recycling or changing the light bulbs, and include longer term choices like picking smart ways to fund their retirement. This in turn could make the difference between someone saving for the future or deciding it’s really not worth the effort.

New research commissioned from YouGov for NEIW and released earlier this week found that over 13 million British adults (27%) would be likely to invest in a Green ISA during the next twelve months.

Green ISAs could also speed up the low carbon transition by helping to raise additional finance for the Green Investment Bank (GIB). This idea got the thumbs up from the Wigley Commission. Its report earlier this year estimated that the GIB might, in time, raise £2bn a year through Green ISAs. While this is only a modest contribution to the massive low carbon funding gap, the Commission highlighted also that it would be a “visible and symbolic” way to engage the public.

We think this is true. The YouGov research for National Ethical Investment Week found that more than half (54%) of all British adults with investments want to make money and make a difference in the world, so long as they can achieve both at the same time.

This research also discovered that over half (52%) of investors would consider investing in renewable energy to help the sector receive greater funding.

Its time to harness the power of savings and investments to advance the shift to greener living.

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