Question to the HM Treasury:

To ask Her Majesty's Government, further to the Greenpeace UK and WWF-UK report The Big Smoke, published on 26 May, what assessment they have made of the recommendation that legislation should be introduced before COP26 to require all UK-regulated financial institutions to adopt and implement a transition plan that is in keeping with the goal of limiting global temperature rises to 1.5 degrees C.

The UK was the first major economy to commit to Net Zero by 2050, and to achieve that ambition, we want to ensure that every financial decision takes climate change into account. This will require a drastic increase in the quantity, quality and comparability of climate-related disclosures, to provide the information necessary for everyone to make informed decisions.

That is why, in November 2020, the Chancellor announced the UK’s intention to make disclosures in line with the recommendations of the Task Force for Climate-related Financial Disclosures – including that firms must disclose how they identify, assess and manage climate-related risks – fully mandatory in the UK across the economy by 2025. This includes the financial services sector. This commitment is world-leading and significant progress towards achieving our ambition, including new requirements for premium-listed firms, has already been made.

We have also committed to implementing a green taxonomy that will establish a common definition for ’sustainable economic activities’ and improve understanding around the impact of firms’ activities and investments on the environment.

Together, these measures will ensure that firms across the whole economy are disclosing robust and comparable climate and sustainability-related information that is decision-useful for investors. This will help close the sustainability data gap, as well as preventing greenwashing and supporting the greening of the UK economy.

In addition to this work, ahead of COP26, the UK launched the Glasgow Financial Alliance for Net Zero (GFANZ), a global net zero alliance for the whole financial sector to ensure credibility and generate momentum behind private sector commitments to reach net zero emissions by 2050. GFANZ will mobilise and elevate net zero ambition by motivating financial institutions to make credible net zero commitments by the time of Glasgow and beyond and establishing defined and agreed ways for all financial institutions to meaningfully commit to net zero by 2050.