Further Delays for UK Green Taxonomy

The UK government will miss its 1 January 2023 legal deadline to propose regulations on climate technical screening criteria for the planned Green Taxonomy, according to an announcement made by Andrew Griffith, HM Treasury’s Economic Secretary. He said the development of the taxonomy is a “complex, technical exercise”, pointing to challenges that have arisen in the EU as it’s developed its own environmental taxonomy, such as the late addition of gas and nuclear energy. Subject to parliamentary approval of the Financial Services and Markets Bill, which will repeal retained EU law relating to financial services, HM Treasury will first commence the repeal of the statutory requirement to make technical screening criteria regulations by 1 January and will then “decide whether to change the UK’s approach”. A further update will be provided as part of the government’s publication of its Green Finance Strategy in early 2023. UKSIF CEO James Alexander noted that the development of the Green Taxonomy is “very important for investors and companies seeking clarity on how to align their activities with net zero”. The taxonomy will also closely underpin other aspects of the UK’s future sustainable finance regulatory framework, such as the Financial Conduct Authority’s recently announced sustainable fund-labelling requirements. Alexander said: “We urge government to restate its intention to swiftly delivering a science-based taxonomy and a clear timeline for implementation, following through on the UK’s commitments made in the ‘Greening Finance Roadmap’. This step would help prevent the UK falling behind the EU and other jurisdictions in its leadership on sustainable finance, and we look forward to continue engaging with government and other members of the Green Technical Advisory Group in the coming months.” 

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