The government has pledged £10 million to develop two new green finance research hubs based in London and Leeds.

Energy minister Anne-Marie Trevelyan said that the investment would mean the two cities would be home to a new UK centre for “driving global green finance and investment.”

The new UK Centre for Greening Finance and Investment (CGFI) will be launched in April, with physical hubs opened in Leeds and London a few months later.

The hubs will be led by a partnership made up of a number of UK institutions including the University of Oxford, the University of Leeds, and Imperial College London.

The research centres will generate data and analytics for financial institutions and services, including banks, lenders, investors and insurers around the world to better support their investment and business decisions by considering the impact on the environment and climate change.

The government said that the hubs will attract and develop new green finance talent from around the world to the UK’s major cities.

“Climate change is the biggest issue that we need to tackle to protect our planet for our children and grandchildren,” said energy and clean growth minister Anne-Marie Trevelyan. “While the government has invested billions of pounds so we can end the UK’s contribution to climate change, we will not reach our net zero target without mobilising private capital and unleashing the power of the free market.

She added: “The UK Centre for Greening Finance and Investment in London and Leeds will encourage financial services to turn the tide of their investments and focus on sectors and companies that have a smaller environmental footprint. Doing so will support industries and businesses to develop clean green innovations, creating thousands of jobs across the country – ensuring we build back greener.”

Economic secretary to the treasury and city minister John Glen said: “We’ve set the ambition for net zero – now we must ensure our financial sector has the tools and information to get behind the transition. We’re already improving the climate data available by mandating TCFD-aligned disclosures across the economy and implementing a green taxonomy."

He explained: “This new centre will advance the UK’s leadership in green finance and bring forward the day when firms can access environmental data and analytics for every place on Earth, past, present and future.

The government said that successfully reducing climate change is estimated to deliver multi-trillion pounds of additional private sector investment every year.

It explained that the centre will help “divert investment away from unsustainable activities” like deforestation and fossil fuels and push it towards low carbon sectors.

“Integrating climate and environmental data and analytics into decision making will allow financial institutions to identify, measure and manage the financial risks and opportunities from climate change, and so support the Bank’s objective to ensure the financial system is resilient to these risks and supportive of the transition to net zero,” said Sarah Breeden, the Bank of England’s executive sponsor for work on climate change. “The Bank of England is delighted that the CGFI will support firms’ efforts in this important area, including for the forthcoming Climate Biennial Exploratory Scenario.”

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