Financing the Future: Why Engineers Must Be Heard in the Net Zero Transition

At the City of London’s Net Zero Delivery Summit, finance leaders reaffirmed their role in tackling climate change. However, David Bogle says that without engineers at the table from the start, sustainable investment risks falling short of its potential

I ATTENDED the City of London’s Net Zero Delivery Summit, part of London Climate Action Week, as an engineer who sees finance as critical to enabling engineers to develop the systems needed to tackle climate change. The UK has experienced rapid growth in sustainable finance, with a wide range of sustainability-related products now listed. Many of these come from international issuers, highlighting London’s status as a “well-established one-stop shop for green finance”.

The event was largely UK based, with speakers and panellists from HSBC, AVIVA, EY, the City of London Corporation and others but there were also speakers from the International Energy Agency, the Financial Services Agency of Japan, Singapore’s Ambassador for Climate Action and a closing speech from the COP30 president-designate.

The net zero challenge presents a major business opportunity for UK engineering and the City’s financial sector, driving investment both domestically and globally. China has made significant investment over a long period in infrastructure and technology and is beginning to reap the rewards, particularly in battery technology. This doesn’t mean the imminent end of oil and gas, where many IChemE members work, but it does mean we need to use fossil fuels wisely as we transition to renewable sources of energy and feedstocks. The chief energy economist of the International Energy Agency reminded us that most energy growth is still in fossil fuels. There is a huge role for chemical engineers in the new technologies for renewables, batteries and more sustainable feedstocks with plenty of business and employment opportunities if the finance is available.

Commitment to sustainable finance

I was pleased to hear about the priority that the City puts on sustainable finance and its role as a global leader. There were certainly encouraging signs that the industries strong in the City – banking, insurance and shipping – are committed to the net zero challenge. Numerous schemes – such as transition finance and carbon markets – have been introduced, but they are not yet functioning effectively in developed countries and offer limited support for the pressing challenges faced by developing nations. There was a clear message that we need to do this in a more cooperative way but it is not yet clear that this message is getting through.

I did feel that the voice of engineering needs to be heard more strongly. Much of the finance is to support engineering projects but engineers need to be heard to ensure that the investment is technically wise for the long term and within the whole ecosystem.

I’m sure engineers are consulted on the detail but they need to be part of the discussions early to ensure that the best projects – in terms of financial, technical and environmental sustainability – are taken forward. This was brought home to me when I raised concerns about the exponential rise in AI’s energy demands and was told that major efforts to scale up, including nuclear expansion, were underway. This missed the point as the energy need is now, and new nuclear build takes decades to come on stream. We need smarter use of AI and to discourage its blind use everywhere, which seems to be the fashion.

I was impressed that the session on climate and nature highlighted the importance of viewing them together. We heard from Aviva and Tony Goldner, the chief executive officer of the Taskforce on Nature-related Financial Disclosures, about the financial and health benefits of this integrated approach. As engineers, we stress the need for systems thinking to optimise outcomes across all aspects and avoid silo thinking which often leads to suboptimal solutions.

The discussion on carbon trading left me with the sense that the heavy reliance on voluntary commitment is not reliable. The system isn’t functioning yet, so it must improve to make sure that all countries, whatever their stage of development, can contribute.

It’s good to see the commitment and efforts but there is still a long way to go. Finance is critical but is just the start for making net zero happen.