• Policy
  • Research
  • 10 June 22
  • Published by Elisse Funnell

GIIA Regulating for Investment Report

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In our new Regulating for Investment report, GIIA makes recommendations on the current policy and regulatory frameworks in the UK, with a focus on how responsible investment can support the economy and environment whilst remaining sensitive to affordability concerns.

Meeting the societal and climate challenges of the 21st century, alongside growing consumer expectations on service quality, will require significant investment. Our report calls for an overhaul of the policy and regulatory framework to incentivise this investment in a way that is efficient and affordable over the long-term. It is informed by discussions we have had with a range of stakeholders, including consumer groups and think-tanks and our aim is to kick-start an important conversation about what infrastructure we need, how we should organise its delivery and how it should be paid for in a way that is fair and affordable both within and across generations.

 

Our recommendations are clustered under three broad headings:

  • Make sure the institutional arrangements are right. Further clarity on the boundary between government policy and independent regulation is needed. Regulators duties should be simplified with a clear set of priorities. And we need to hold regulators to account so that they address those priorities effectively.
  • Regulation needs to incentivise the delivery of high-quality infrastructure. The current system of regulation works well at incentivising short term efficiency improvements in operating expenditure. However, investors and companies need to have the certainty and predictability to invest over the long term.
  • Tackle the challenges of affordability head-on. Cost of investment should be spread equitably across multiple generations of consumers whilst targeting support for the most vulnerable citizens. We need regulators to build intergenerational fairness into their framework.

 

Within this report we have tried to assemble viewpoints into what we hope is a broad consensus with the aim of bringing regulators, industry, and government closer together, to ensure we are all pulling in the right direction to deliver the transformative levels of investment that are needed to ensure we decarbonise the UK universally and equitably.