In light of the UK Chancellor’s recent announcements – the mandating of Task Force on Climate-related Financial Disclosures (TCFD) and the introduction of a sovereign green bond – the investment industry is calling for greater collaboration and for the government to go further with its plans for a net-zero transition.
In its recent Climate Change Position Paper, the Investment Association (IA) has urged the government to amend company law to require all large UK incorporated companies (public and private) to report in line with TCFD.
The IA said it will commit to helping its members engage with listed companies to improve their reporting, and will work with pension fund clients to help them meet their climate-related disclosure requirements.
Investment managers face several challenges when it comes to TCFD disclosures, and the IA paper commits to helping overcome these by supporting the implementation of forthcoming disclosure requirements under the EU Sustainable Finance Disclosure Regulation, and working towards the development of disclosures on net zero alignment.
At a portfolio level, the industry body will assist members with TCFD disclosures by developing guidance, such as the IA Responsible Investment Framework, as well as helping disclose the extent to which portfolios are aligned to the delivery of the Paris Agreement.
The paper also calls on the government to ‘make good’ on the intention to launch sovereign green bonds, and to help create sector-specific plans towards transitioning to net zero.
In the paper, the IA sets out a number of areas the industry has recommended the government prioritise. These include fully decarbonising buildings by 2050, developing infrastructure that rewards carbon capture, encouraging electric vehicles, increasing the supply of low-carbon power, increasing forest cover in the UK, amending vehicle and fuel tax, phasing out fossil fuels.
It welcomes collaboration with the government and regulatory bodies such as the Financial Conduct Authority (FCA).
Chris Cummings, CEO of the IA, said: “The UK is now at critical juncture as we look to honour our commitment to reaching net zero by 2050. Our industry will stand together with government, businesses, and our clients to realise this change, and ensure the UK remains a global leader in sustainable finance.”