UK prime minister Rishi Sunak (pictured) has announced a new department for energy security and net zero today as part of a cabinet reshuffle.
It will be headed up by Grant Shapps (pictured right), previously secretary of state for transport.
The new department is one of four replacing the former business, energy and industrial strategy department.
In a statement the government said the creation of a net-zero department “recognises the… need to secure more energy from domestic nuclear and renewable sources as we seize the opportunities of net zero”.
In January, MP Chris Skidmore published his net-zero review in which he urged the government to do more to engage with businesses on green growth and set out 129 recommendations on how to do so, including creating sustainable governance structures, creating incentives for green businesses and increasing transparency.
James Alexander, CEO of the UK Sustainable Investment and Finance Association and ESG Clarity EU Committee member, said implementing the recommendations in this review requires a “consistent policy environment” and while the decision to create a dedicated department to net zero has merit, “a more pressing priority for our members continues to be a clearer delivery plan for the transition of the real economy and financial services in the coming years.”
He added: “We recommend government consider credible decarbonisation roadmaps for key economic sectors, underpinned by near-term actions to shift financial flows towards net-zero, while exploring a positive UK response to the US Inflation Reduction Act.”
ESG APPG chair Alexander Stafford MP said the announcement must “lead to a scaling up of the UK’s net zero ambitions, with ESG considerations positioned at the core”.
He said: “This newly-created department must grasp the clear opportunities provided by ESG frameworks for the race to net zero.”
Richard Lum, CIO of Victory Hill Capital Partners, called it an “opportunity” for the government to reset its thinking and back necessary technology needed to transition.
He added: “Ministers however will need to be careful that UK energy policy and its industrial policy stay joined up to ensure decarbonisation continues to play a central role. They also need to maintain an overall sense of ownership between the different briefs as it is not sufficient to only hold energy production to the objectives of net zero, but also drive wider industrial transformations if we are to meet our climate goals.”