Government should further consult finance industry on UK’s net zero path, says investment body
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The government should consult on a ‘transitional taxonomy’ to ensure the finance industry understands the country’s net zero pathway, the UK Sustainable Investment and Finance Association (UKSIF) has urged.
In a government policy briefing today, the group will also caution policymakers to avoid a mandatory approach to carbon targets and instead encourage a broader range of firms to pursue climate-conscious initiatives.
It follows COP26 last month, where chancellor Rishi Sunak challenged the finance industry to make the UK the world’s first net zero aligned financial centre.
But in the rush for net zero, there should be more meaningful engagement between savers and asset managers, the group added, to ensure investments are not being pumped into fossil fuel or carbon-heavy projects on the customers’ behalf.
UKSIF will also urge the government to introduce a carbon pricing system, to mirror the European Union.
“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,” chief executive James Alexander said.
“Our latest views on those areas that should be carefully considered include: greater clarity over government’s future net-zero investment plans, further strengthening investor stewardship, and developing a world-leading sustainability disclosure requirements regime and green taxonomy to comprehensively address sustainability risks and tackle the serious threat posed by greenwashing.”