Asked by
To ask His Majesty’s Government, further to their commitment in
Greening finance: A roadmap to sustainable investing, published
on 1 October 2021, to consult on the “UK Green Taxonomy” in the
first quarter of 2022, what plans they have to publish the draft
taxonomy.
The Parliamentary Secretary, HM Treasury () (Con)
The UK green taxonomy is an important part of the Government’s
ambitious programme of work on sustainable finance. However, it
is critical that we learn from approaches being developed in
other jurisdictions and take the time to get this right. The
Government will continue to engage with scientific experts and
market participants this year on how best to take forward work in
this area.
(LD)
I thank the Minister for her reply. As she will know, many firms
really support the transition to net zero, but this will not be
achieved without clear direction from government. The
Government’s independent green taxonomy advisory group told them
last month that they had to send a “rapid market signal”, or we
risked falling further behind Europe, which launched its taxonomy
in 2020. So when will the Government publish their consultation
on the green taxonomy? Will we get it by Christmas, or will the
market just have to accept that we will fall further behind in
the world and never become the financial leader on green issues
that we should be?
(Con)
My Lords, I agree with the noble Baroness on the importance of
progressing this work at pace but it is also important that we
get it right. For the green taxonomy to have real value for the
market, we need to make sure that it is user-friendly and
operable, and that is what we are focused on. We continue to
progress our work in this area and remain committed to producing
the green taxonomy.
(Con)
My Lords, I welcome my noble friend back to her place on the
Front Bench. Could she outline the work in this area to reduce
greenwashing, and could she highlight the work on carbon
offsetting? Does she share my concern that, although it is right
and helpful, in environmental terms, to plant trees, they must be
planted in appropriate areas, so as not to cause more flooding
rather than reducing it?
(Con)
The Government are taking a number of steps. The FCA, for
example, has consulted on a sustainable investment-labelling
scheme so that, when consumers and investors are told that they
are investing sustainably, they have better information to show
that that is based on an objective assessment of those
investments.
(CB)
My Lords, a year ago, the Prime Minister, then the Chancellor,
made the commitment at COP 26 that the UK will be
“the world’s first net zero aligned financial centre”.
Does the Minister—whom I welcome back to the Front Bench—agree
that, to achieve that, we need a robust and respected taxonomy
for green investment? Does she also agree that this is an
increasingly competitive area, with other countries having
exactly the same objective? Does she accept the need for urgency
in this area?
(Con)
I agree that the green taxonomy is an essential part of being a
leader in green finance. The UK has led the way: we were the
first country to lay regulations to make reporting mandatory
under the TCFD framework and firms listed on the London Stock
Exchange have the highest sustainability disclosure rate of any
global financial centre. But, if we want to continue that
leadership, we need to continue to make progress. We have laid
out a number of future steps under our road map. I accept that
some have been delayed, and it is for us to continue to work to
make better progress, to ensure that we continue to lead in this
area.
(LD)
Last night in this House, the Lord Mayor of London underscored
that retaining our leadership position on green finance is
essential to retaining a leading role in financial services far
more broadly. Understanding the pressures generated by that,
could the Minister please tell us when we will get the green
finance strategy? Given all the government changes, could she
publicly recommit to the earlier commitments to become the first
net zero-aligned financial centre, as described by the noble
Baroness, Lady Hayman?
(Con)
My Lords, that commitment has not changed. On the importance of
retaining our leadership position on green finance for London as
a financial centre, I completely agree with the noble Baroness:
that is why we have been so ambitious in this area. We have taken
a number of steps to ensure that we lead the way, and we work
with our international partners to bring them along with us. When
we chaired the G7 last year, we got commitments on sustainability
disclosure requirements, for example, from all the G7 Finance
Ministers. So we are not just leading the way; we are also trying
to bring other countries with us.
(Lab)
My Lords, for the avoidance of doubt, I have already welcomed the
noble Baroness back to the Front Bench. The concept of a green
taxonomy is of value to investors assessing how green a company
is—that is almost self-evident. It is also of value to companies
because it protects them from litigation accusing them of
greenwashing. A number of actions are occurring around the world
in which companies are being sued for overpromising on
greenwashing. To be really valuable, however, the taxonomy needs
to be international. What progress is being made on gaining
international consensus?
(Con)
The noble Lord is absolutely right that, to be most useful,
having international agreement on a taxonomy is essential. The
Government have supported the development of international
standards in this area: for example, we have worked with the
International Sustainability Standards Board to ensure that there
is international alignment on the work in these areas.
(Con)
My Lords, I also welcome my noble friend back to the Front Bench.
I echo the calls for us to urgently release the information on
the green taxonomy. Could my noble friend please confirm that the
Government remain committed to a green taxonomy that is
science-led? Could she also confirm the position regarding
natural gas as a transition fuel, given concerns about the
security of the energy supply in the short term?
(Con)
I assure my noble friend that we will be led by science in this
area. Earlier in this Question, noble Lords referred to the work
of the Green Technical Advisory Group, which was set up to advise
the Government on the UK green taxonomy and is informing our work
in this area. There is a question about the inclusion of both gas
and nuclear in the green taxonomy. The Government have not made
any decisions on their inclusion, but they will engage with
experts and the market before making any final decision in this
area.
(Con)
I also welcome my noble friend back to the Front Bench, even
though the Prime Minister has fired me but not rehired me—
Noble Lords
Oh!
(Con)
I apologise; I was not after the violins. When I dealt with
developing the green taxonomy in the European Parliament, we did
not look only at companies that can certify themselves as green
and ensure investors; we also looked at how to incentivise
companies that are not yet green to become greener. How will the
Government tackle that in developing their green taxonomy?
(Con)
I take this opportunity to pay tribute to my noble friend’s work.
I saw at first hand the energy and commitment that he brought to
his roles. He is absolutely right that information is the first
step on this path, and it then needs to be used to ensure that
firms working in all sectors make plans for transition and action
to ensure that their activities are aligned with net zero by
2050. Our green finance road map sets out the path that the
Government think firms can take towards that aim.
