Why the GPC was Created
The Green Purposes Company (GPC) took up its role on 18th August 2017 when ownership of the Green Investment Bank (GIB) transferred to Macquarie in the private sector. This was also the date that relevant sections of the Act of Parliament which established the GIB were repealed. The GPC was created to maintain the public commitment of the GIB to invest only in its green mission, by giving GPC a special share.
The GIB was created with a unique mission in the financial markets – to play a leading role in making the green infrastructure investment needed to create a low-carbon economy and to tackle global climate change.
The GIB was originally given this role by the UK Parliament, which laid down the five green purposes that now define the legally binding corporate objective in GIB’s articles of association. However the government wanted the GIB to expand into new parts of the green economy, to become financially independent and free to raise capital, without the constraints of classification as a public sector body. This has been achieved by moving it to the private sector and also by repealing the statutory powers that controlled its activities.
On 2nd February 2016, the Government announced that it would set up a special share to help ensure that the GIB’s green purposes continued to drive all its future investments.
The GPC was created as the holder of the special share, independent of both government and the GIB. The GPC acted in a shadow capacity from 31st October 2016 before formally being created by the transfer of ownership of the GIB on 18th August 2017. Since then the green purposes of the GIB cannot be changed without GPC’s approval. They are a part of the GIB’s constitution and can only be changed with the permission of the GPC. This right of veto is the purpose of the special share held by the GPC.