ARTICLE
1 August 2025

Navigating The Transition Finance Landscape (Podcast)

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Guernsey Finance

Contributor

Guernsey Finance is a joint industry and government initiative which seeks to promote and connect the island’s financial services sector in its chosen markets internationally. Based in Guernsey, the agency conducts marketing, communications and business development for members firms and also employs representatives in London, Hong Kong and Shanghai.
In this episode of the Sustainable Finance Guernsey podcast, our host Rosie Allsopp speaks with Ashleigh Lee from the City of London Transition Finance Council.
Guernsey Finance and Banking

In this episode of the Sustainable Finance Guernsey podcast, our host Rosie Allsopp speaks with Ashleigh Lee from the City of London Transition Finance Council. They discuss the role of transition finance in decarbonising high-emitting sectors, the insights gained from London Climate Action Week, and the objectives of the Transition Finance Council.

Transcript:

Rosie (00:00.91)

Hello and welcome to the latest episode of the Sustainable Finance Guernsey podcast, which is rated one of the top 10 most useful sustainable finance podcasts by Green Finance Guide. Guernsey is one of the jurisdictions leading the way in green and sustainable finance and as part of this podcast series, we speak to and learn from some of the leading global figures in the field. My name is Rosie Allsopp, I am Communications Director at Guernsey Finance. We are the promotional agency for the Island's Financial Services sector.

Today, I'm very pleased indeed to be speaking with Ashleigh Lee, who is from the City of London Transition Finance Council. So the Transition Finance Council was co-launched by the City of London Corporation and His Majesty's Government. It's tasked with driving forward the roadmap and recommendations set out in the Transition Finance Market Review and to establish the UK as a hub for raising and deploying transition finance. The Council's aim is to leverage the UK's existing strengths to credibly raised transition capital, invest and obtain financial and professional services in support of UK and global net zero ambitions. The council is led by chair Lord Alok Sharma and includes representation from financial and professional services sectors, real economy, government, regulators, standard setters and civil society. Today, Ashley and I will be discussing the work of the council and its recent market reviews. So welcome, Ashley. It's lovely to have you with us.

Can we start with you telling the audience a little bit about yourself and how you came to work for the Transition Finance Council?

Ashleigh Lee (01:37.477)

Absolutely and thank you so much for having me on the podcast. Love your work. I know we're going to talk about communications in a bit, but you know, these types of forums are so important for spreading the word so thank you for all of your good work.

Rosie (01:41.304)

So welcome, so welcome. Thank you.

Ashleigh Lee (01:52.999)

So a bit of background to myself. You may note that I'm from New Zealand originally, I'm not from the UK, but I've been here for a few years, working at the City of London Corporation for a few years as well. So I'm a senior policy advisor here in our sustainable finance innovation team. So we kind of seek to position the UK's financial centre at the kind of forefront of sustainable finance, both in the way they kind of operate and bring standards and products to the world. And my background before that was in banking and a little bit in policy as well. And How I got into the transition finance work is that our sort of network of financial and professional services companies throughout London and the UK. I think it's sort of been a natural progression for them to have moved from a focus on kind of pure green to how do I have real world transition impact and they've been calling for the UK to do more in this space and we've been helping them to make that call to the government as well and so that's why we were really well placed to pick up this work when the UK government commissioned the transition finance market review and so it was a real pleasure for me to co-lead the Secretariat of that review with DESNEZ as the Department of Energy Security and Net Zero here in the UK. And that really placed the City of London well to continue that work through the Transition Finance Council, which is now a really pleasure for me to lead the Secretariat of. Yeah, so that is a bit about me and the City of London.

Rosie (03:44.622)

So let's go back to basics for people who may not be aware. What is transition finance? What role does it play?

Ashleigh Lee (03:55.143)

So as simply as I can put it, I think it's about getting money to higher emitting or hard to obey sectors to help them to decarbonize and to transition over time. So it's not about just what is already green, but what's moving towards green. And I think that it's about that real world impact and sort of questioning what's the role of the finance sector in the transition.

It's not just about moving money in their portfolio around. It's about actually making sure that what we're doing in the finance sector is having impacts in the real world. So how can we get more money into activities that we know are needed for the transition? And how can we help bring those sectors and companies that we know need to transition along on that journey? So it's not just about emissions and climate targets. It also means cheaper energy, stronger supply chains, more resilience in that, in the economy. I think what we're trying to do is follow the blueprint for success that we've already seen with renewables. So we know that solar costs are down 80 % in the last 15 years. Wind is now the cheapest form of power in many places. But we need to apply this model to other high emitting industries, and we need to do it more quickly. So I think that this change is inevitable, but what we're trying to do is catalyze it and help it to happen more quickly and in a way that kind of brings everyone along and in a way that's kind of just and fair.

Rosie (05:28.162)

Yeah, absolutely. So at the time of recording, the City of London had recently held London Climate Action Week. Ashleigh, what were your main takeaways from, you know, the week's events?

Ashleigh Lee (05:43.899)

Yeah, I'm just still recovering actually. It was just last week. it was, I think we had over 600 events and many visitors in the city. So very exciting and very fast paced. I guess the first reflection is that it was extremely hot this year. I think we were close to 30 degrees most days and it did bring to life that we still need some better cooling systems around the city.

Ashleigh Lee (06:12.487)

But I did feel that there was a real optimism in the air and I think that part of that is the sort of shift from ambition to action. Like people no longer are turning up to these climate weeks to make grand gestures and pledges. We've seen sort of tougher political climate and I think people are really there to turn up to actually get stuff done and that was quite encouraging. And it's pretty clear that there are still a lot of people getting stuff done, even if it's sort of being talked about it in a different way. I would say this, but transition planning and transition finance was a huge theme. I couldn't have attended all the events on transition finance during the week. So that was great to see. There was also a really big international presence. So we had large delegations from Brazil, Australia, China, UAE, to name a few and they were similarly to the London stakeholders kind of there to collaborate and look for partnerships and making routes forward. And I think people were quite clear eyed and realistic. The conversations moved on a little bit from just talking about barriers, but I think people kind of understand that there are barriers and that there's work to be done still.

Rosie (07:32.718)

Thank you. With that in mind, can you tell us a little bit more about the work of the City of London through the Transition Finance Council?

Ashleigh Lee (07:42.951)

Yeah, so the Council starts from the Transition Finance Market Review, which I mentioned earlier. So that was commissioned by the UK government and kicked off at the beginning of 2024 and that was sort of tasked with the market to look at how to make the UK a leading centre for credible transition finance, and that review was led by Vanessa Hubbard Williams, and it ran over a period of 10 months. So we spoke to over 200 experts, ran lots of workshops, we had a public call for evidence, so there was a huge push for engagement. And then we published a report in October 2024, reflecting all that engagement and research - and it was really broad ranging. So we were looking at, you know, what can government do? What can regulators do? What can the market do? What should companies be doing?

And Transition finance is quite a holistic thing. So we're not just talking about sort of labeled instruments. We're talking about kind of anywhere that transition finance might come from and where it flows to that has a real world transition impact. So just to kind of name a few of the takeaways from that process, which kind of leads into the work that the council is doing now, we heard that there's a need for clear kind of transition roadmaps at the global and at the sectoral level. So, financiers need to know what good looks like in each sector and they need to know what sort of interventions are coming down the line and the shape of the finance that's needed and how it will be made viable. We need smarter public finance. So, both the policy levers and the kind of grants and concessional finance, it needs to be quite strategic and this is both kind of something we heard in the UK around simplifying the landscape, but also in the way that we look at flows to emerging markets as well. We heard clearly the need for a clear definition and kind of guardrails around credibility that would help this to exist in a kind of place of trust and clarity and not have concerns about greenwashing or what actually is transition finance? What are we trying to achieve? What's in and out kind of?

Ashleigh Lee (10:03.089)

complicating the conversation. We also heard that transition plans and transition strategies was a really key enabler and a lot of excitement about, I know that it's happening now, but there's still a long way to go to sort of put transition planning at the forefront of transition finance, but that is happening and there's a lot of great work going on and a lot of opportunities that will come out of that. And We, of course, recommended the establishment of the Transition Finance Council itself. So the reasoning for that is that there were so many recommendations towards so many different actors and we, as much as effort as we put into the report, we know that reports themselves don't make change happen, and so the objective as the council is to use that as a roadmap and to report on progress, catalyze enthusiasm and capacity building and collaboration to make that happen.

Rosie (11:07.336)

You touched on this very briefly earlier, there's some political headwinds to ESG and sustainability focused investments, especially overseas and at home. How can the council navigate these headwinds and deliver on its core ambitions?

Ashleigh Lee (11:23.077)

Yeah, so I think it's definitely a challenge and one we wouldn't be wise to kind of say doesn't matter, although there is a lot of action still happening. I think it's important to acknowledge that the politics will come and go and that the transition won't be linear, but the economics aren't actually changing and we know that investing in net zero will in the long run save us money, reduce risks, create better jobs. And just to call on some research that came out recently in the UK that said that our green economy is growing three times faster than the wider economy. People working in the green economy earn on average about 15 % above the national average wage. But we need to do better at telling that story. We're very good at talking to each other. And I think London Climate Action Week was a demonstration of that, but it's not necessarily being well articulated to the public in a sort of simple way.

And I think that remembering something like the An Inconvenient Truth, which had a profound impact on me as a teenager, and that boiling frog metaphor still really sticks with me. But I'm not sure that that would land in the same way today and I think we are in these sort of bubbles. And There's a danger that this conversation is not kind of reaching your average voter or pension holder and big conferences and reports are probably not the way to do it. So I wouldn't say I have all the answers there, but I think that as a transition finance council, we're trying to use real world examples, use plain language and communicate not just with the people who are already supportive, but everyone that needs to come on this journey because it is really about future proofing our economy.

Rosie (13:18.71)

I can absolutely get on board with everything that you just said there about messaging. So it would be good to talk about the three dedicated working groups within the council, which I understand are led by members of the strategic steering group. And they advance the council's objectives by delivering targeted outputs in three main areas. So starting with the credibility and integrity working group, can you tell me what guidelines are being developed and how these are complementing existing kite marks such as Guernsey Green Fund.

Ashleigh Lee (13:51.269)

Yeah, so just, guess, maybe to start with an overview of what the three working groups are. There's one, as you mentioned, on credibility and integrity and so that's developing and consulting on transition finance guidelines, which are hoped to promote credibility and integrity in the market. And That's chaired by Vanessa Hubbard Williams, who chaired the review. We also have the second one being the sort of pathways and policies working group.

And that's developing best practice for sector transition roadmaps, which unlock finance. And That's chaired by the Right Honorable Chris Skidmore, former energy minister. And the third one is scaling transition finance. So really getting into what are the real world applications, what's working, what's not, and how can we kind of move the dial, and that one's chaired by Faith Ward,

who's head of responsible investment at Brunel Pension Partnership and also chairs the Institutional Investors Group on Climate Change, if I got the acronym right. But to come back to your question on the first one and the guidelines, so it's coming back to that point I made about the focus being not on what's purely green, but also what is getting greener. I think that's a concept that everyone largely kind of agrees with and resonates with. But then, of course, as soon as you try to apply that on a transactional level, there is a huge amount of questions about, you know, what does it mean to be credible? What activities are in and out? What companies are in and out? So the guidelines that we're developing through this working group are not about kind of creating a whole new set of standards for people to worry about, but it's more about trying to navigate what's already there and try to make sense of the sustainability labels like the kite mark, bond labels, and then not labels as well, but in thinking about how a financial institution might meet its net zero targets, how are they defining transition finance, how are they measuring their portfolio emissions, because one of the key challenges with transition finance is that if the easiest way to meet your

Ashleigh Lee (16:11.778)

It's our objectives is to divest from higher emitting assets and companies, but we know that that doesn't drive real world change. But we also know that it shouldn't be an excuse to just finance whatever you like and not affect change. So these guidelines are intended to be a voluntary standard that works internationally that will help you navigate that space and to make some coalescence around what good looks like in transition finance.

Rosie (16:13.974)

It's just sell everything, yeah.

Ashleigh Lee (16:41.081)

And We sort of differentiate between the activity level and the entity level. So by activity, mean, I mean, where you have a taxonomy that kind of sets out transition and green activities, that's helpful. But even where you don't, it's about sort of understanding what activities are part of the sort of science-based pathway and also ensuring that the companies who are the beneficiaries of that you use of proceeds finance, have a credible strategy around what they're doing. But it's also about transition finance at the entity level and by that we mean sort of general purpose financing or finance going to a company as a whole, because a lot of the finance does exist in that space, particularly for the institutional investors and so starting to define what a credibly transitioning entity looks like so that you can say, you know, this company in my portfolio, who I'm extending a loan to is sort of best in class for its sector. It is credibly transitioning, and what that looks like will be, in many cases, contextual. It's not a sort of best practice and one company is the same for all companies around the world and in all sectors. So it's about kind of understanding what standards you can refer to, what local context you should look at and starting to try and reach some consensus around the principles of what credible transition finance looks like. We will be publishing a consultation later this summer, so hopefully in August, and you can already see a discussion paper that we published during London Climate Action Week, which is up on the Transition Finance Council website which starts to lay out some of the things we'll be looking into.

Rosie (18:34.862)

Interesting. Could you explain how increased clarity can deliver measurable increases in investment from both public and private financing and how that works in practice?

Ashleigh Lee (18:50.373)

So whilst I agree to a certain extent, I would say that clarity alone will not actually drive real world transition finance. What it does do is lay the groundwork. So we heard time and again during our engagements with the review that capital is held back by fear of green washing, lack of trust in the market. So there is not confidence around what can be financed and what way and how to report an impact.

So I think it's a base level. require this clarity to let this market succeed, although the clarity itself isn't going to change the economics and the financial flows, at least in the short term. I think that in the longer term, what clarity can do is improve the data and the information flows in our understanding. So in that respect, if we have good communication and we start to track trends, transition finance flows and that is something we're starting to look at, then that can inform and influence policy and regulatory levers that will end pricing decisions that will drive that real world change.

Rosie (20:01.272)

The second working group focuses on pathways, policies and governance. How can new roadmaps offer certainty in achieving net zero targets?

Ashleigh Lee (20:12.943)

Yeah, well, from a financing perspective, if you imagine you're an investor and you want to back clean still, and you know, we hear from investors all the time, you know, my capital stands ready, I just need the sort of economic conditions to invest, and it is about that to a certain extent, I think it's saying, you know, here is the direction that the real economy will be traveling in.

Here's how certain solutions will be made viable. And it's not always absolute certainty, but it's about kind of what have we actually committed to in the real time? What's the level of optionality and kind of certainty about medium term and longer term interventions? How regulation will shape demand? I think that's a key one. We often kind of hear about interventions on the supply side.

But if you look at a sector overall, you start to understand the shape of the demand and the supply and how the finance will become de-risked where it's needed. So it helps to set out that certainty. It also can provide a sort of helpful benchmark or way of assessing a company against its peers and I mentioned that sort of entity level transition assessment. So it's really helpful contextually to understand because we know that certain sectors are harder to abate and the pathway is less certain than others. So if we have the sector roadmap in place, it helps us to understand the actions that the company should be following and better assess and influence their direction. And I would note that these sector roadmaps will have lots of use cases. So I think they have use cases for the businesses and the sectors, for the policy makers and the regulators.

But where the Transition Finance Council is really focused is that how can we use them to scale finance and to kind of create an enabling environment for transition?

Rosie (22:14.958)

Sure. So the UK has outlined its commitment to net zero. Ashleigh, how do you think that centres like Guernsey allow global investors to continue to inject capital to these targets?

Ashleigh Lee (22:30.853)

Yeah, I think in many ways, Guernsey is in a similar position to the UK in that respect, that it's you know, it's not just about our own transition, we're financial centres that are looking to enable and fund the global transition and so for that to happen, it's about kind of directing capital flows towards opportunities and to help shape best practices. So I think it's kind of aligning standards and frameworks to global standards and encouraging other markets to do the same. And, you know, With that respect, I would encourage anyone listening to engage with our own Transition Finance Council consultation when it comes out, because we're absolutely not intending to create standards that only work in the UK, we're looking to kind of create something that's globally applicable. I think it's also about some of the I guess you could say, woolier things that are less kind of tangible, but no less important. So things like the collaboration between markets, the creation of platforms and knowledge sharing spaces and capacity building, because a lot of these problems are global and centres like Guernsey are really well placed to share information, share innovations that have been developed and kind of multiply that work that's going on elsewhere as well.

Rosie (23:57.484)

Now, anyone who's listened to this podcast before will have probably heard me say that in Guernsey, we are very proud of our status as a world leader in sustainable finance. We have the Guernsey Green Fund and Natural Capital Fund kite marks, as well as pioneering several insurance products. How important is it for firms and industry bodies to push the boundaries of the industry to enable these developments and support this transition?

Ashleigh Lee (24:24.837)

Yeah, I think incredibly important and great to have been asked the question because I think sometimes we are focused on what's happening now and we're not thinking about kind of all the innovation that needs to happen and I think that's because it's one of those things where you sort of in the moment, it feels like a slog, but when you look back at all the exciting things that have happened in the last five years, you're like, wow, that was actually, you know, we are moving quickly.

And It is really important that industry are on the forefront of that innovation and industry can move faster than regulation and also push regulation in the direction it needs to go to enable the transition. So I think, you know, firms and industry bodies have a unique ability to experiment and iterate and send clear signals to the market whether or not there's the political support there as well. And I think funds like the Guernsey Green Fund

show what's possible where you set voluntary standards, kind of coalesce around what that looks like and push this forward because standards themselves, like we said, don't drive change, but the coalescence behind them and the momentum does lead to real world change, and it shows everyone else that we are committed and there is long run economic support behind this.

Rosie (25:48.952)

Gather that momentum. Would you, I mean, we did talk about this at the top of the interview, did you, Would you agree that the issue of communicating the transition has always been a challenge, especially with increasingly vocal opposition in both media and some sections of government? And how important is it to effectively the message of course I wouldn't necessarily say transmit but to you know deliver that message of the necessity of transition finance?

Ashleigh Lee (26:19.983)

Yeah, I think it really is the defining challenge that will shape the next decade and I won't pretend that there's a silver bullet or that I really have the answers. But we know that the transition is underway, we know roughly what needs to be done and what needs to be financed and we know that the longer we wait, the more it will cost, both economically and socially. But that message is not necessarily cutting through everywhere.

So I think we need to explore, you know, new spokespeople, better stories, simpler language. And I don't know whether it will be the risk lens or the opportunity lens that speaks louder. Probably it's both because both are sort of real. The transition will have winners and it will have losers and no one is going to be able to say they didn't see it coming. So I think that that communication piece is absolutely essential.

And Sorry, I can't come here today and tell you what the answer is. But I know through things like this podcast and your listeners and their own networks, that's how we spread change. So I do encourage people to come together with the answers and at least the effort as well.

Rosie (27:36.908)

Just keep talking about it. Yeah, absolutely. I'm afraid that's all we have time for today. These things always go so quickly. Thank you so much for joining us today Ashleigh it's been really great to speak to you. Thank you so much for being our guest and thanks to our listeners for listening. If you'd like to find out more about what Guernsey has to offer, you can visit our website, which is guernseyfinance.com. And If you'd like to find out more about Guernsey's success in other sectors, you can tune into our sister podcast, the Guernsey Finance podcast.

We also have quite a back catalogue of interviews and panel discussions. You can check those out by searching for sustainable finance, Guernsey, wherever you get your podcasts. If you enjoyed today's episode, you can leave a like or a review or you can subscribe so you never miss an episode. And We really love to get your feedback, so please do engage with us and we'll be back soon with another episode of the Guernsey finance the sustainable finance Guernsey podcast. Thanks for listening.

Ashleigh Lee (28:37.575)

Thank you very much.

Rosie (28:37.614)

Thank you.

For more information about Guernsey's finance industry please visit www.weareguernsey.com.

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