UK Chancellor of the Exchequer Rishi Sunak will set out Wednesday — “Finance Day” at the COP26 climate conference in Scotland — the UK’s plans to become the world’s first net-zero-aligned financial centre. Sunak will call for other countries to follow the UK’s example.
Under the proposals to be announced at the conference, there will be new requirements for UK financial institutions and listed companies to publish net-zero transition plans, detailing how they will adapt and decarbonise as the UK moves towards a net-zero economy by 2050, HM Treasury said.
Firms and their shareholders will decide how their business adapts to this economy-wide transition, including how they plan to decarbonise the emissions they finance.
To guard against greenwashing, a science-based “gold standard” for transition plans will be drawn up by a new Transition Plan Taskforce, composed of industry and academic leaders, regulators, and civil society groups, HM Treasury said.
The task force is due to report at the end of 2022, and once standards are developed, firms will be expected to start publishing transition plans in 2023.
At the Glasgow conference, Sunak will urge:
- Financial firms to “mobilise private finance quickly and at scale” and call on governments to enact bold climate policies to take advantage of these resources.
- Developed countries to achieve the $100 billion climate finance target to help developing countries, including by helping them access financial commitments to net zero made by the private sector.
In moving to the $100 billion target, the UK government is to spend £576 million on initiatives to mobilise finance into emerging markets and developing economies.
Sunak will announce the launch of an innovative new financing mechanism — the Climate Investment Funds’ Capital Markets Mechanism (CCMM) — that will boost investment into clean energy, such as solar and wind power, in developing countries.
— Oliver Rowe (Oliver.Rowe@aicpa-cima.com) is an FM magazine senior editor.