The Treasury Committee has launched an inquiry into the
decarbonisation of the UK economy and green finance. This
inquiry will scrutinise the role of HM Treasury, regulators
and financial services firms in supporting the Government’s
climate change commitments. It will also examine the economic
potential of decarbonisation for the UK economy in terms of
job creation and growth.
Terms of Reference
This inquiry will cover:
- The economic opportunity that decarbonisation presents for
the UK, and the potential of the green finance sector
- HMT’s strategy in facilitating clean growth and its
response to the CCC’s net-zero recommendations
- The role of the Spending Review in facilitating net-zero
- The role that financial services firms are currently
playing in financing the transition
- The 'green' financial product landscape and their
associated regulatory environment.
Some of the key questions the Committee will consider in this
inquiry include:
The economic opportunity
What economic costs and benefits does decarbonisation present
for the UK?
What benefits can a growth of the Green Finance sector
deliver for the UK, and does the UK hold a competitive
advantage in this space?
How might HMT deliver a regionally balanced and ‘just’
transition across the UK?
HMT's strategy
What is HMT’s current strategy, and approach to, UK
decarbonisation, and is it fit for purpose?
How does HMT work with the Clean Growth Strategy and
government departments to support decarbonisation? Is this
working well?
How should HMT’s approach evolve to ensure the Government
meets the legally binding net-zero target?
What role should the 2020 Comprehensive Spending Review play
in UK decarbonisation? What projects or measures should
receive additional funds through this process?
Green finance
What role do UK financial services firms currently play in
the decarbonisation of the economy (for example, through
stewardship, capital allocation to green projects, green
financial products)?
What more can they do? What steps have UK banks, asset
managers, and pension funds taken to ‘green’ their business
models, investments strategies and balance sheets, taking in
to account climate and transition risks?
Are there any barriers (regulatory or otherwise) preventing
financial services firms from delivering green finance or
investing in ‘green’ assets? What prudential risks does
climate change pose?
What is the Financial Conduct Authority and the Prudential
Regulation Authority doing to support decarbonisation and a
‘greening’ of the financial system?
What expectations do (and should) they place on regulated
firms about their role in the transition through their policy
and supervisory activities?
What is the consumer demand for ‘green’ financial products?
Are there a range of accessible options available to
consumers seeking to source ‘green’ financial products across
the product suite (for example, mortgages, bonds, investment
products, savings accounts, loans)?
Do certain instruments dominate the green finance landscape,
and if so, why? Do accompanying documents for ‘green’
instruments (bonds, funds, etc) articulate why and how the
composite holdings within that instrument are ‘green’? Are
obligations placed upon listed companies, to report their
carbon emissions, to inform fund composition?
Does the current advice and KYC process effectively
facilitate a consideration of sustainability preferences?
Witnesses Libby Peake,
, Nick Molho,
and
