Investors in green ISAs would be the first to benefit from further rises in the tax-free savings limit under a Tory Government, says shadow chancellor George Osborne.
A future Conservative Government would commit "to introducing Green ISAs and make them a priority for any increases in ISA tax-free saving limits", he told the assembly at Imperial College London today.
Underpinning his plans to enable everyone to be "an investor in our low carbon future" is a Tory-backed report from an independent group led by Emma Howard Boyd of Jupiter Asset Management.
The report out today says: "The working assumption is any future tax-free savings limit increase would be exclusively for Green/Low Carbon ISAs."
To qualify for green ISA status, assets would need to be in funds investing in green or low carbon companies, or low carbon funds which invest in companies committed to reducing their carbon profile, according to the report. Both active and passively managed funds would be applicable.
Another proposal is the introduction of green bonds, which are more likely to suit institutional investors but could also be opened up to the retail market. They could be sold along with a major marketing campaign along the lines of "Invest in Britain's Clean Energy Transition".
Emma Howard Boyd, head of socially responsible investment and corporate governance at Jupiter, says: "It is essential we achieve significant progress on green finance initiatives to drive forward the transition to a genuinely low carbon economy.
"The commitment by the Conservative Party to the introduction of a Green/Low Carbon ISA is another workable idea and could be an important contributor to change."
Asked how soon the Conservatives would enact their plans, she says: "My reading is they will get things going as soon as possible.
"The Green/Low Carbon ISA makes environmental and economic sense and we are pleased to be involved in its development."
Penny Shepherd, UKSIF chief executive, says: "Green ISAs will enable individual investors to make money and make a difference to climate change. It is good news that people will be able to shelter some of their rainy day money in ways that help to protect against the dangers of climate change.
"It should encourage new savings, as well as allowing a greater proportion of existing investments to be held tax free and help to build a better world. This should be a win-win solution for savers and the environment."
What made financial headlines over the weekend?
Went into administration April 2018
Threat of legal action looms over Woodford IM
View from the front row