Conservative peer Lord Wei has called for the Government to introduce green tax breaks for venture capital funds, pension funds and individual investors.

The UK needs more investment in green technology if it is to meet the challenges of climate change, the energy crisis and coping with another pandemic, Lord Wei argues.

Plus the country needs new technology to enable training and education if it is going to prepare for the huge shift in the labour force, as automation makes many blue and white collar jobs redundant.

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In particular, pension funds should allocate a small portion, less than 5 per cent, to green technology venture capital engaged in so-called impact investing and accept the higher management feed VCs charge. To not do so, the peer warns, given the societal and planetary risks we face, is a risk itself; one that the regulatory system should be accountable for.

One idea could be for local authority pension funds, of which only 30 per cent currently make impact investments, to drive this change.

Or the Government could encourage younger investors, used to investing via apps, to invest up to £3,000 tax free through green tax breaks for impact investing ISAs or have the same amount invested through workplace pensions invested in impact investment.

“This would be transformational for ventures in Britain and solve the current growth stage shortage of capital,” Lord Wei said in his report, commissioned by impact investor Future Planet Capital.

Not only should the Government reward the next generation of young savers to back impactful investing, but the state must do more to encourage innovative technology in procurement.

Lord Wei said: “We have come a long way in reversing the crises of our age, but to secure this progress for future generations requires us to go further; to not just talk green but act green. The technologies needed to achieve net zero simply do not exist today, nor do the tools to protect us against the next pandemic. To secure these, there needs to be a dramatic increase in the flow of capital to the world’s best scientists and engineers.”

Further reading

Why your business should pivot to the green economic recovery