Recommendation 74

HM Government Not Addressed

Government response: Partially agree At COP26, the UK launched the Energy Transition Council, with over 20 governments and over 15 international institutions participating, to support countries’ transitions to clean power. The Council’s Rapid Response Facility is mobilising technical assistance for 20 countries. The UK’s COP Presidency energy transition campaign has focused on accelerating the global transition from coal to clean power by: • Growing the coalition of countries, sub-national governments and businesses committed to phasing out unabated coal power, building on the Powering Past Coal Alliance; • Ending international coal finance, with recent commitments from the G20, including South Korea, Japan, and China; • Strengthening the international offer of finance and assistance for clean power so that it is the most attractive option for new power generation; • Establishing a new financial framework to accelerate the just transition from coal in major coal economies like South Africa and India; • Driving ambition on product energy efficiency standards by doubling the efficiency of four key products sold globally by 2030. This will also help to meet Sustainable Development Goal 7 to ‘ensure access to affordable, reliable and modern energy for all by 2030’. The UK Government no longer supports the extraction, production, transportation and refining of crude oil, natural gas, or thermal coal overseas, with very limited exemptions to the policy that will be granted only in limited circumstances. The exemptions are applicable to a small number of situations and are necessary to make this policy work in the real world and allow an orderly transition away from fossil fuels. They reflect the current state of renewable technologies and markets, ensure that neither taxpayers nor developing countries are disadvantaged and, most importantly, are in line with achieving the Paris temperature goals and Nationally Determined Contributions (NDC). Projects are considered on a case-by-case basis, with the exemptions being monitored by an internal cross Whitehall governance group to ensure compliance and relevance with the UK’s fossil fuel policy. CDC now the British International Investment’s (BII) approach is fully aligned with the Paris Agreement and HMG policy. At COP26, BII committed to invest over £3bn in climate finance over the next five years—accelerating its already substantial investment in renewable energy (over $1 billion since 2017). In addition, BII is leading other development finance institutions to encourage more private sector investment in adaptation and resilience. BII publishes information on all of its investments on its website https://www.cdcgroup. com/en/, this includes details on both direct and indirect investments. BII has been reporting under the Taskforce on Climate-related Financial Disclosures (TCFD) since 2019. To complement TCFD reporting, last year BII published its energy portfolio, and this is an exercise BII plans to repeat. Responsible exits are a key part of BII’s mandate. BII does not intend to offload the emissions problems in developing countries onto other investors. Instead, it will actively support companies to adapt and transform to reduce their carbon footprint, as it has been doing in South Africa through the Just Transition Road Map. BII is developing a carbon budget which will set out the clear trajectory for achieving net-zero by 2050 and meeting the ambitions of the Paris Agreement. It will share this information with the Committee in due course.