Source · Select Committees · Environmental Audit Committee
Recommendation 11
11
We further recommend that the Government updates its Green Finance Strategy to add an explicit...
Recommendation
We further recommend that the Government updates its Green Finance Strategy to add an explicit objective to reduce the carbon intensity—and therefore the climate risk exposure—of the UK corporate sector and financial markets, such as the London Stock Exchange. The Government should examine how best to use the mechanism of mandatory climate-related financial disclosures to encourage listed companies to draw up transition plans aligned with the objectives of the Paris Agreement. (Paragraph 83) Investment in infrastructure and nature recovery
Government Response
Acknowledged
HM Government
Acknowledged
The Green Finance Strategy, published in July 2019, is a comprehensive framework to making change across Government and regulators in green finance. It is a world leading document and approach that many jurisdictions are now following. This mechanism has been supplemented with the Interim Report of the UK’s Joint Government-Regulator TCFD Taskforce which has set out the next steps for the implementation of fully mandatory TCFD disclosures within the UK. In doing this, the UK has become the first major economy to commit to implement such a regime. Mandatory TCFD-aligned disclosures would require that organisations provide decision- useful information to help: i) build awareness of climate-related risks, opportunities and impacts across the economy; ii) integrate assessment and management of these risks, opportunities and impacts; iii) inform investment decisions, improving market effectiveness through more efficient pricing and allocation of capital, empowering stewardship and driving economic change to support the transition to a lower carbon economy and resilience to physical climate risks; and iv) stimulate the development of green financial products—and competition between providers of these products—with follow on benefits for consumers. The Government will formally review progress against the aims and objectives of this strategy in 2022.