**UK Launches Green Finance Pilot to Tackle Barriers to Emission Cuts**
Chancellor Rachel Reeves will direct UK financial regulators to address obstacles hindering businesses from cutting carbon emissions, as part of a broader push to accelerate green economic growth. The initiative will be unveiled in her first major speech to the City of London as Chancellor during the Mansion House address.
The new *Transition Finance Pilot* will be jointly led by the Financial Conduct Authority, the Bank of England, and the Green Finance Institute. Its purpose is to pinpoint structural and regulatory barriers that deter high-emitting businesses from investing in decarbonisation.
The pilot will assess how current climate-related projects are financed and engage with industry stakeholders to identify chokepoints and propose policy or market reforms.
This move follows an independent review of transition finance published in October under the previous Conservative government. That review identified key barriers including perceived financial risks tied to nascent decarbonisation technologies, lack of clarity on long-term government backing, and fears of reputational damage for firms adopting gradual emission-reduction (rather than immediate net-zero) strategies.
Chancellor Reeves’ remarks will be delivered alongside Bank of England Governor Andrew Bailey. They are expected to reinforce Labour’s agenda of green growth and economic reform. In her previous Mansion House appearance, Reeves had criticised regulators for failing to align with growth priorities — a stance she’s now putting into action through structural reform.
While the UK economy exceeded growth expectations in Q1 2025, the momentum has since slowed. Economists warn that Reeves may face pressure to raise tens of billions in new taxes to preserve fiscal balance later this year.
By unlocking green finance, the government believes it can attract up to £200 billion in investment — a strategic boost for the economy. As a government source noted, this is part of a larger strategy to “stimulate green growth in the UK economy.”
