All financial firms and FTSE-listed companies will be required to publish plans on how they plan to transition to net zero under proposed new rules from the Treasury.
The plans, outlined at the COP26 climate summit in Glasgow, will require firms to publish information by 2023 on how they aim to move towards a low-carbon future, in line with the UK’s 2050 net-zero target.
Chancellor Rishi Sunak said these proposals were pat of his aim to make the UK the first ‘net-zero financial centre’.
However the proposals stop short of telling firm how to decarbonise their businesses or investment portfolios. Under these plans financial institutions and FTSE-listed companies will have to publish targets and the steps they plan to take to achieve these goals. These plans will then be independent scrutinised to ensure they are robust and to guard against “greenwashing”.
The Treasury plans to set up a taskforce to set a science-based ‘gold standards’ to help evaluate these transition plans.
Sunak is due to address a meeting of finance ministers, central bank governors, and those running financial companies and institutions at the COP26 summit, with the focus for meetings today on greening the global financial system.
According to the BBC, Sunak will announced that 450 firms controlling 40 per cent of global financial assets have now set net zero targets and aligned themselves to the Paris goals, of limiting global warming to 1.5 degrees above pre-industrial levels. This equates to some £95 trillion of assets
The Glasgow Financial Alliance for Net Zero (GFANZ), chaired by former Bank of England Governor Mark Carney, said that this private capital that was commited to net zero aims should help keep global warming to 1.5 degrees centigrade.
However some campaign groups said Sunak’s proposed measures do not go far enough and needed to backed with greater public investment.
Shaun Spiers, executive director of environmental think tank Green Alliance said: “Private sector investment is vital, but it will be much easier to achieve on the back of serious investment by the Chancellor.”