Trustees of Britain’s green investment bank have raised the alarm over its operations for the first time since its sale to an Australian bank six years ago.
The Green Investment Group (GIG), owned by Macquarie Bank, has “lost ground to peers” in areas such as disclosure and risk, experts appointed to monitor its work have warned.
They added they were “disappointed” the group has not invested in wider projects such as protecting biodiversity.
It is the strongest language used by the board of trustees since Britain’s Green Investment Bank was sold to Australian banking giant Macquarie for £2.3bn in 2017.
The Green Investment Bank was set up by the coalition government in 2012 to help drive investment into green energy. It was an early backer of the UK's offshore wind industry and instrumental in attracting funding for ventures such as biomass fired power plants.
The coalition government privatised the bank to reduce its burden on the public balance sheets.
Plans to sell the public banks sparked fears that its investments in British green energy projects would be watered down. It was sold with a “special share” held by independent trustees to soothe fears and ensure the company was held to its green mission.
In their annual letter to the group, dated November and published this week, the trustees said the bank remained a “market leader in green investment” but said: “We take the view that this position is increasingly at risk: other players have caught up and, in some assessment areas, overtaken GIG in market best practice.
“The main areas where, in our view, GIG has lost ground to peers include disclosure, stakeholder engagement and risk.
“GIG therefore needs to rapidly evolve across several assessment areas if it wishes to maintain its leadership position through which it can help unlock the further flow of investment.”
GIG in green energy projects around the world, including wind and solar power, battery storage and hydrogen. It has invested or arranged more than £26bn of investment over the past ten years.
Its latest accounts, for the year ending March 31 2022, show it generated turnover of £6m during the year, down from £123m in 2021. It reported net assets of £240m, relatively flat on the £243m from the previous year.
Last year, it set up the specialist offshore wind developer Corio Generation, which has about 20 gigawatts in the pipeline globally, as well as a new electric vehicle charging business, Fleete.
A spokesperson for Green Investment Group (GIG) said: “We value our positive and constructive relationship with the Green Purposes Company [the owner of the special share] and we were pleased that they concluded that GIG remains a market leader in green investment with expertise to shift the dial on the flow of capital into green projects.
"However, we don’t rest on that position and welcome the trustees’ feedback as we grow our business and accelerate investment in the energy transition.”