The UK government has announced the formation of a new advisory group that will oversee its delivery of a green taxonomy – a common framework setting the bar for investments that can be defined as environmentally sustainable.
The taxonomy will make it easier for investors and consumers to understand how a firm is impacting the environment given that hundreds of new sustainable investment funds come to the market and sales to UK retail investors have tripled from 2019 to 2020.
“A UK green taxonomy will provide better data on the environmental impact of firms, supporting investors, businesses and consumers to make green financial decisions and accelerating the transition to net zero,” said Economic Secretary to the Treasury John Glen.
The so-called ‘GTAG’ (Green Technical Advisory Group) will provide independent, non-binding advice to the government on developing and implementing a green taxonomy in the UK context.
The green taxonomy is considered an important step in the government’s efforts to boost investment in projects that accelerate the transition to a sustainable economy, create green jobs and support the UK’s environmental goals.
The GTAG will also help classify climate-friendly assets, help clamp down on ‘greenwashing’, and identify investments that do not live up to their sustainable credentials.
It will be chaired by Ingrid Holmes from the Green Finance Institute and is made up of financial and business stakeholders, taxonomy and data experts, and subject matter experts drawn from academia, NGOs, the Environment Agency and the Committee on Climate Change.
The GTAG will meet for the first time this month and run for at least two years, providing its initial recommendations to the government in September.
The government will set up a separate energy working group as part of GTAG to provide advice on hydrogen, carbon capture, utilisation and storage, and how to address nuclear power in the taxonomy.
The new advisory group comes as the steps up its fight against climate change, placing the issue at the top of the domestic agenda and making it the centrepiece of its G7 presidency.
This week the BOE (Bank of England) commenced its climate risk stress testing programme for major banks and insurers.
Source Regulation Asia