Marking a major contribution to the Green Horizon Summit hosted by the City of London this week, the chancellor, Rishi Sunak, has outlined the following measures designed to encourage green and sustainable investment as part of the country’s economic recovery and to ensure London’s financial centre takes steps to tackle climate change and supporting the global transition to net zero emissions:
Issuing the UK's first ever Sovereign Green Bond by 2021 (subject to market conditions), with further issuances to be planned.
Implementing a "green taxonomy": a common framework for determining which investment activities can be defined as environmentally sustainable to aid investment decisions.
Becoming the first country to make mandatory TCFD (Task Force on Climate-related Financial Disclosures) -aligned climate risk disclosures for a range of UK companies to be implemented in phases over the next five years.
Details of the new reporting requirements, many of which are expected to come into force by 2023, are expected to be unveiled by the end of the year and we will provide a more detailed analysis when information becomes available.
For more information, see here.
Commenting on the proposals, Lux Nova’s Louisa Cilenti views the introduction of mandatory climate reporting as a bold and positive step from Government and will be welcomed across industry which has been making the case for more transparency in investment decision-making and disclosures around the impacts of climate change underpinned by common metrics and global standards that promote consistency and comparability.
These are just the first steps and all large businesses should take note and consider taking pro-active measures now, to put in place strategies to align their businesses with best practice, ensuring they remain compliant and ahead of the game in this fast-moving space.
