UK government must guide investors to net zero

UKSIF says more clarity needed to become net-zero aligned financial centre

More clarity is needed from the UK government on how the country is to become the world’s first net-zero aligned financial centre, as announced on Finance Day at COP26 in November.

This is according to financial services membership organisation UK Sustainable Investment and Finance Association (UKSIF), which released a December policy briefing calling on the UK government to provide “much greater clarity over future public investment plans in the ‘green economy’ and supporting project development across the public sector”.

James Alexander, CEO of UKSIF, said: “Our collective understanding of a net-zero finance sector remains nascent, and it will therefore be critical for the sector to engage closely with government to identify the policies and actions required in the years ahead to progress towards the UK’s world-leading ambition.”

The briefing also said the government should include a section on net-zero in every Budget statement and consider integrating carbon pricing into the tax system.

To help investment funds, UKSIF said the government should emphasise stewardship over divestment, and that it should mandate climate transition plans for large private companies. Key to using these plans will be the UK’s upcoming Sustainability Disclosure Requirements (SDR), which UKSIF said must be made compatible with EU and other sustainability regulation. It also hopes SDR will include biodiversity considerations, and a transitional and social taxonomy.

See also: – What we know about SDR so far

Alexander added: “developing a world-leading Sustainability Disclosure Requirements regime and Green Taxonomy [can] comprehensively address sustainability risks and tackle the serious threat posed by greenwashing.”