Recommendation 24

HM Government · verbatim extract Accepted

In November 2020, the Chancellor announced that the UK would implement a Green Taxonomy to create a common understanding of which economic activities are environmentally sustainable, improving understanding of the impact of firms’ activities and investments on the environment. On 9 June, Government launched a Green Technical Advisory Group to provide independent advice on taxonomy development and implementation This will include advising on how to ensure the metrics and thresholds which underpin the taxonomy (Technical Screening Criteria) are based on robust science, and are practicable and suitable for the UK market. Finally, the Chancellor has made sustainability disclosures a key priority of this year’s G7 Finance Track and secured ambitious commitment for G7 countries to work closely together and with international partners to determine the best approach to ensure global consistency in environmental impact reporting. HM Treasury is also actively involved in the International Platform on Sustainable Finance. The Government is required to make Technical Screening Criteria via secondary legislation for climate change mitigation, and climate change adaptation no later than 1 January 2023. These TSC will be subject to appropriate, open consultation prior to making. In addition, the Government will publish a Roadmap setting out the approach to green finance regulation ahead of COP26. 1 FS19/6: Climate Change and Green Finance; summary of responses and next steps (fca.org.uk) 2 TechSprints, Financial Conduct Authority , published on 11/09/2017 3 The Digital Sandbox Pilot, Financial Conduct Authority, published on 04/05/2020 4 Regulatory Sandbox, Financial Conduct Authority, published on 11/05/2015 5 Green Fin Tech Challenge, Financial Conduct Authority, published on 19/10/2018 6 Sarah Breeden provided oral evidence during the Decarbonisation and Green Finance inquiry Treasury Select Committee meeting on 30 September 2020 7 ‘ Tackling climate for real : the role of central banks’ , Andrew Bailey, Reuters Events Responsible Business 2021, 1 June 2021 8 ‘ Tackling climate for real: progress and next steps’ , Andrew Bailey, Green Swan Global Conference, 3 June 2021 9 The Bank of England’s climate-related financial disclosure report 2020/21 10 Key elements of the 2021 Climate Biennial Exploratory Scenario 11 Options for greening the Bank of England’s Corporate Bond Purchase Scheme – Discussion Paper 12 The PRA published Supervisory Statement 3/19 ‘Enhancing banks’ and insurers’ approaches to managing the financial risks from climate change’ in April 2019 and sent a letter to the CEOs of banks and insurers in July 2020 13 The PRA expects firms to include further information in their Internal Capital Adequacy Assessment Process (ICAAP) or Own Risk and Solvency Assessment (ORSA) 14 The CFRF is a forum comprised of financial firms and is co-chaired by the PRA and FCA 15 Sarah Breeden, the Executive Sponsor for climate change and Executive Director of UK Deposit Takers Supervision at the Bank of England, is the chair of the NGFS Macrofinancial workstream. Anna Sweeney, Executive Director of Insurance Supervision at the Bank of England, is the chair of the Sustainable Insurance Forum. Victoria Saporta, Executive Director of Prudential Policy at the Bank of England, is chair of the International Association of Insurance Supervisors. 16 CCS0521556086-001_Mansion_House_Strategy_Document_FINAL.pdf (publishing.service.gov.uk) Published: 15 July 2021 Site information Accessibility statement