PIMFA
Green Finance Strategy
- Mobilising Green Investment – 2023 Green Finance Strategy
This year HM Treasury has published ‘Mobilising green investment: 2023 green finance strategy’, an update to the earlier 2019 strategy. The 2023 Green Finance Strategy aims to reinforce and expand the UK’s position as a world leader on green finance and investment, delivering five key objectives:
- UK financial services growth and competitiveness – the UK can and will do more to support our financial services sector to prosper from a transitioning global economy.
- Investment in the green economy – private investment will be crucial to delivering net zero, building climate resilience and supporting nature’s recovery. To deliver on the UK’s net zero ambitions, through the late 2020s and 2030s, an additional £50-60 billion capital investment will be required each year.
- Financial stability – an effective green finance framework will ensure the finance sector has the information it needs to manage risks from climate change and nature loss.
- Incorporation of nature and adaptation – this Strategy will explicitly incorporate both nature and climate adaptation into the government’s green finance policy framework.
- Alignment of global financial flows with climate and nature objectives – the UK can capture a huge economic opportunity by supporting the global transition, whilst building closer relationships with high growth emerging markets and developing economies as they seek to meet their own financing needs.
The Strategy sets out the framework for the UK to become the world’s first Net Zero Aligned Financial Centre, outlining how the government will ensure market participants have the information and tools they need to align to the climate and nature goals. It also outlines a structure for supporting technologies as they grow to commercialisation, including through the work of the public finance institutions. In addition the paper sets out the next steps to grow high integrity voluntary markets including a framework for developing nature markets in the UK. Finally, the strategy shows how the UK is building on the legacy of COP26 by accelerating global growth in green finance, including to emerging markets and developing economies.
Click the image below to read the 2023 Green Finance Strategy.
- UK GREEN TAXONOMY
In the updated Green Finance Strategy, the Government confirmed it will deliver a UK Green Taxonomy – a tool to provide investors with definitions of which economic activities should be labelled as green. This will support the quality of standards, labels and disclosures used in the industry for green finance activity. The Government proposes that nuclear will be included within the UK’s Green Taxonomy, subject to consultation.
After the Taxonomy has been finalised, companies will be initially expected to report voluntarily against it for a period of at least two reporting years after which the Government will explore mandating disclosures. Government does not wish to place undue burdens onto companies whose size or scale makes the disclosure of taxonomy related information unreasonable. Therefore, the Government we will develop proposals with proportionality in mind and expects to consult on the Taxonomy in Autumn 2023.
