MPs on an environmental watchdog at Westminster have urged ministers not to go ahead with the proposed privatisation of the Green Investment Bank (GIB) unless the bank’s objectives are protected and strengthened.
In June, business secretary Sajid Javid announced that the bank would be moved into private ownership, arguing it would operate across a wider range of green sectors and finance more projects. He pledged that a privately owned GIB would “continue this clear focus on green sectors”.
He said then: “As part of any sale process, we would expect potential investors to confirm their commitment to the GIB’s green values and to set out how they propose to ensure these are protected.”
But now the Environmental Audit Committee has warned in a report that the decision “appeared rushed” and ministers had not produced convincing evidence that it will achieve its aims better in the private sector.
Chair Huw Irranca-Davies said: “The Government is currently relying on assurances from potential shareholders and the commercial case for retaining the GIB’s green purposes. That is not robust enough.
“The Government must ensure the GIB continues to do what it says on the tin. If the Government cannot guarantee that the bank will retain its green purpose in the private sector then the sale should not go ahead.”
Since the GIB launched in November 2012, the Government-owned institution has been charged with unlocking private investment in low-carbon and green sectors.
The committee report criticises the Government for taking the decision to privatise the bank without due transparency, publication of relevant evidence, consultation or proper consideration of alternatives.
The report identifies two key risks that could result from the privatisation that cannot be avoided by protecting its green purposes:
- It will move its focus away from novel and complex projects that struggle to find funding in favour of easier, more commercial projects
- A privatised GIB could invest in areas that may damage its reputation and undermine its leadership role in the green economy
Irranca-Davies added : “We need a bank that has the freedom to operate in ways that conventional commercial banks cannot. The green purposes of GIB must not only be properly protected - they should be strengthened.”
The committee has called on the Government to publish a business case and all impact assessments related to the sale.