Business Secretary Sajid Javid has today announced the Green Investment Bank (GIB) will create a "special share" in the company to protect its core mission as a green investor after its planned sell-off.
The holders of this special share will be independent of both the GIB and government, and will have sole responsibility for blocking any attempts to remove or water down the bank's green credentials that are currently enshrined in its core mission statement and underpinning legislation.
Under the new plan, any eventual private investor in GIB will need to seek the approval of the special shareholder to make any amendments to the bank's green mission.
The move was announced today in Parliament during the second reading of the Enterprise Bill, which is being amended to allow the GIB's part-privatisation to go through.
It effectively enacts a demand made by Lord Teverson in November last year, who tabled a successful amendment to the Bill calling for a special share mechanism to be established after arguing the current safeguards for protecting the bank's green mission after sale were not adequate.
Environmental campaigners had warned the structure of the planned privatisation would remove the legislative requirement for the bank to focus on low carbon projects and increase the risk of the new owners backing higher carbon projects, such as fracking developments.
Since the passage of the Lords amendment the government has been working with the GIB and the Office for National Statistics (ONS) - the arbiter on whether a body is classed as public or private - to design a special share mechanism that would provide additional safeguards while ensuring the GIB could still be classified as a private body.
The government has maintained the GIB needs to secure private status if it is to borrow to raise additional capital.
Business Secretary Sajid Javid said the special share mechanism will protect the GIB's work going forward. "To ensure the GIB's green credentials are maintained it plans to put a special share structure in place that protects its green mission and keeps it focused on what it does best," he said in a statement ahead of his Parliamentary announcement.
The GIB was set up in 2012 to drive private investment in higher-risk areas of the green economy. In June Business Secretary Sajid Javid announced the government's intention to privatise the bank in order to allow it to borrow more capital without adding to government debt.
However, the ONS ruled that in order to obtain status as a private body, the government must repeal any involvement or control it has over GIB's operations. As part of the privatisation process, the legislation in the Enterprise Bill enshrining the GIB's green ethos must be removed from the statute - a requirement which has prompted fears the bank could be hijacked by private investors seeking to make investments not aligned to its core values.
The government will be hoping the special share measure adequately addresses these fears and puts to rest political resistance to the GIB sell-off, which reached a head late last year with the publication of a report from the Environmental Audit Committee (EAC) that accused the government of rushing the privatisation process without ensuring proper safeguards were in place.
The measure will run parallel to other additional safeguards announced by the government in recent weeks, including a requirement that any potential private investor in the GIB will need to agree to a set of principles that commit them to upholding the bank's green mission - a requirement dismissed by some commentators as "voluntary pledges" that do not provide a secure lock on the bank's activities.
The special share will only be worth a nominal value in financial terms - likely to be £1 - and its holders will not be involved in the day-to-day running of the GIB, a source close to process told BusinessGreen. The shareholders would only become involved once there is a proposal to amend the Bank's original mission statement, they added.
In order to select who will hold the special share in the coming weeks GIB will formally select three "Blue chip professional companies" to appoint one member from their staff to form a "nominations committee", the source said. This nominations committee will then collectively select a chairperson for the special share company, and the chair will in turn select two more members for the company.
This process is designed to ensure the government exerts no influence over the make up or operations of the special shareholders, although it does also mean neither the GIB nor the government have any ability to ensure the process selects individuals with 'green' credentials.
As part of the conditions for privatisation set out by the ONS, the government must repeal the Teverson amendment calling for the special share from the Enterprise Bill. However, BusinessGreen understands that GIB intends to set the wheels in motion to establish the special share immediately - meaning by the time the Enterprise Bill appears for a second vote in front of the Lords it will be clear a special share is being practice.
from Home - business_green http://ift.tt/1nD7DMK
Advertisement
Sourced by "Home Hacks". Scouring and supporting the art of DIY home projects by sharing links and information provided by numerous active reputable DIY veterans and company's. Any projects you start please be of proper age, follow all required safety measures, and use the required protective equipment when handling any chemicals, power tools, or during any construction project. If you need advice regarding your next project we suggest visiting Contractor Talk.
