CEOs of three sustainable investor groups have written an open letter to UK prime minister Boris Johnson urging him not to include natural gas in the UK’s green taxonomy.
Heads of the Institutional Investors Group on Climate Change (IIGCC), Principles for Responsible Investment (PRI) and UK Sustainable Investment and Finance Association (UKSIF) said natural gas is not ‘green’ and should only be seen as a short-term necessity, not a long-term solution.
“The fundamental objection to natural gas being included in the taxonomy is that it is not green,” said Stephanie Pfeifer, CEO of the IIGCC.
“The taxonomy is meant to be a science-based tool to define ‘green activities’ and thereby provide clarity to investors over which of their investments – both current and prospective – can be considered green. There may be a legitimate role for natural gas as a ‘bridge’ during the energy transition, but this should not be interpreted as gas equating to green.”
See also: – IIGCC calls on EU to exclude gas from Taxonomy
This letter comes after the EU confirmed in February it would add natural gas and nuclear to its sustainable finance taxonomy, pending approval from member states and MEPs, in a move the sustainable investment community called “illogical”.
The three CEOs said the inclusion of natural gas would dilute the UK taxonomy’s credibility, confuse investors and increase the risk of greenwashing in investment labelling.
“The inclusion of natural gas would be in direct conflict with the UK’s ambitious decarbonisation targets, the Greening Finance Roadmap’s stated ambition for the UK’s domestic regulation to represent international best practice, and more broadly the legacy of COP26 in keeping global temperature increase below 1.5 degrees possible,” the letter read.
James Alexander, CEO of UKSIF and ESG Clarity Committee member, said: “We continue to have very serious concerns on the prospect that the UK government will shortly determine that natural gas is to be included in the UK’s ‘green taxonomy.’
“The inclusion of gas would significantly damage the UK’s leadership position on sustainability for years to come.
“There is a huge economic and leadership opportunity for the UK should it choose to follow the path of a taxonomy based purely on science, and we urge the government to reflect deeply on this.”