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Select Committee · Environmental Audit Committee

The financial sector and the UK’s net zero transition

Status: Closed Opened: 30 May 2022 Closed: 23 May 2024 22 recommendations 10 conclusions 1 report

The EAC is examining the role of financial institutions, including UK signatories to the Glasgow Financial Alliance for Net Zero, in winding down the financing of fossil fuel extraction and promoting the transition to green energy in pursuit of the Government’s climate and environment targets. Read the call for evidence for more detail about the … Show more

Clear

Reports

1 report
Title HC No. Published Items Response
First Report - The financial sector and the UK's net zero t… HC 277 29 Nov 2023 32 Responded

Recommendations & Conclusions

4 items
2 Recommendation First Report - The financial sector and… Acknowledged

Require the North Sea Transition Authority to calculate decommissioning cost impacts for new licences.

We recommend that to mitigate against the risk of stranded assets from North Sea extraction, the North Sea Transition Authority should calculate what the impact to the UK taxpayer and company profitability would be of requiring the cost of decommissioning to be absorbed for new oil and gas licences through … Read more

Government response AI summary
The government highlights the importance of domestic oil and gas and existing decommissioning regulations, stating that OPRED reviews the risk of stranded assets. OPRED offers to engage further with the Committee to understand their policy suggestion regarding calculating the impact of new duties on operators …
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13 Conclusion First Report - The financial sector and… Acknowledged

Just transition principles not explicitly included within the transition plan framework.

We welcome the Government’s commitment to just transition principles in its Green Finance Strategy and the inclusion of specific workstreams in the creation of the transition plan disclosure framework and implementation guidance. While the Transition Plan Taskforce acknowledges the inclusion of just transition principles within its working group and includes … Read more

Government response AI summary
The government acknowledges the concern, stating the Transition Plan Taskforce (TPT) has launched working groups, including one on just transition, to advise on appropriate integration of these topics into its outputs.
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16 Conclusion First Report - The financial sector and… Acknowledged

Government intentions for Sustainability Disclosure Requirements and mandatory international standards are welcomed.

We welcome the Government’s intentions for Sustainability Disclosure Requirements (SDR). As part of that framework, we welcome the Government’s intention to incorporate International Sustainability Standards Board (ISSB) standards and make them mandatory, its consultation on reporting scope 3 greenhouse gas emissions, and its intention to adopt the Taskforce on Nature-related … Read more

Government response AI summary
The government reaffirms its commitment to implementing Sustainability Disclosure Requirements (SDR) and highlights its support for the Taskforce on Nature-related Financial Disclosures (TNFD), stating it will consider how best to incorporate TNFD recommendations into UK policy.
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18 Conclusion First Report - The financial sector and… Acknowledged

Delays to the introduction of the UK green taxonomy are concerning.

While we welcome the Government’s intention to introduce a UK green taxonomy, we are concerned to note the delays to its introduction. As with transition plan frameworks and disclosures, we support the principle of a mandatory taxonomy to ensure comparability. (Paragraph 111) The financial sector and the UK’s net ero … Read more

Government response AI summary
The government acknowledges the committee's concerns about delays and confirms it is working at pace to publish a consultation on the Green Taxonomy shortly. It plans a testing period of voluntary disclosures for at least two reporting years before considering mandatory obligations, citing complexity and …
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Oral evidence sessions

4 sessions
Date Witnesses
18 May 2023 Amy Jenkins · Department for Energy Security and Net Zero, Fayyaz Muneer · HM Treasury, The Baroness Penn · HM Treasury, The Lord Callanan · Department for Energy Security and Net Zero, Zoe Norgate · Department for Energy Security and Net Zero View ↗
8 Mar 2023 Michael Marks · Legal and General Investment Management, Roslyn Stein · AXA, Steve Waygood · Aviva Investors, Tim Lord · HSBC UK View ↗
14 Dec 2022 Dr Anastasiya Ostrovnaya · Imperial College Business School, Mark Campanale · Carbon Tracker Initiative, Ryan Jude · Green Finance Institute, Sam Alvis · Green Alliance View ↗
24 Oct 2022 Mark Carney · United Nations View ↗

Who gave evidence

14 witnesses
WitnessOrganisationSessions
Amy Jenkins · Deputy Director, UK Net Zero Investment and Workf… Department for Energy Security and Net Zero 1
Dr Anastasiya Ostrovnaya · Senior Research/Teaching Fellow, Centre for Clima… Imperial College Business School 1
Fayyaz Muneer · Deputy Director, Green Finance and Prudential Pol… HM Treasury 1
Mark Campanale · Founder and Director Carbon Tracker Initiative 1
Mark Carney · Special Envoy for Climate Action and Finance United Nations 1
Michael Marks · Head of Investment Stewardship and Responsible In… Legal and General Investment Management 1
Roslyn Stein · Group Head of Climate and Biodiversity AXA 1
Ryan Jude · Programme Director for Green Taxonomy Green Finance Institute 1
Sam Alvis · Head of economy Green Alliance 1
Steve Waygood · Chief Responsible Investment Officer Aviva Investors 1
The Baroness Penn · Treasury Lords Minister HM Treasury 1
The Lord Callanan · Parliamentary Under-Secretary of State (Minister … Department for Energy Security and Net Zero 1
Tim Lord · UK Head of Climate Change HSBC UK 1
Zoe Norgate · Deputy Director, International Net Zero: Green Fi… Department for Energy Security and Net Zero 1

Correspondence

8 letters
DateDirectionTitle
23 May 2024 To cttee Letter from the Parliamentary Under Secretary of State for Energy Efficiency an…
23 Feb 2024 To cttee Letter from the EAC Chair to the Treasury Lords Minister and the Minister for E…
20 Jun 2023 To cttee Letter from the Minister of State for Energy Security and Net Zero providing an…
19 Jun 2023 To cttee Letter from the Minister for Energy Efficiency and Green Finance (Department fo…
30 Mar 2023 To cttee Letter from the Co-Chair of the Glasgow Financial Alliance for Net Zero, respon…
30 Mar 2023 To cttee Letter from the EAC Chair to the Co-Chair of the Glasgow Financial Alliance for…
10 Nov 2022 — Additional responses received to letters sent to signatories of the Glasgow Fin…
18 Oct 2022 — Responses received to letters sent to signatories of the Glasgow Financial Alli…