Published by Global Banking & Finance Review®
Posted on July 13, 2025
2 min readLast updated: January 22, 2026
The UK government plans to ease regulations to help businesses reduce emissions, with a focus on green finance and economic growth.
By David Milliken
LONDON (Reuters) -British finance minister Rachel Reeves will task regulators this week with lowering barriers to businesses seeking to cut their emissions, in a major speech she is to give to the financial services sector, a government source told Reuters on Monday.
Britain's Financial Conduct Authority, together with the Bank of England and the partly government-backed Green Finance Institute, will run a pilot project to assess where regulatory and other barriers exist to projects focused on enabling businesses with high carbon emissions to lower them.
Reeves is expected to make the announcement at her annual Mansion House speech to London's financial sector on Tuesday, where she will speak alongside BoE Governor Andrew Bailey.
In last year's speech Reeves said regulators had placed too little emphasis on supporting economic growth, one of the newly elected Labour government's main goals.
Since then, growth has been lacklustre overall despite a strong first quarter, and many economists expect Reeves will have to raise taxes by tens of billions of pounds in the annual budget later this year to keep public finances on track.
Faster growth would ease many of the government's political and economic difficulties and the government views green finance as having the potential to generate up to 200 billion pounds ($270 billion) in revenue for the economy.
The Transition Finance Pilot will be a small part of that. A finance ministry source said it would focus on looking in detail at how climate projects are financed and working with stakeholders in the market to identify specific barriers and how regulators and other stakeholders could resolve them.
The pilot project follows an external review of transition finance commissioned by the previous Conservative government which was published in October.
This highlighted barriers including the riskiness of unproven carbon-reduction technologies, uncertainty about future government incentives and fears of reputational damage from projects which aim to reduce emissions rather than eliminate them entirely.
($1 = 0.7408 pounds)
(Reporting by David Milliken; Additional reporting by William Schomberg)
The UK government aims to lower barriers for businesses seeking to cut their emissions, as part of a broader push to support economic growth.
The pilot project will be run by Britain's Financial Conduct Authority, the Bank of England, and the Green Finance Institute.
The review highlighted challenges such as the riskiness of unproven carbon-reduction technologies and uncertainty about future government incentives.
The government believes that green finance could generate up to 200 billion pounds, which could significantly aid in economic growth.
Finance minister Rachel Reeves is expected to announce the initiative during her annual Mansion House speech to London's financial sector.
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