The UK government says the green finance management standards that are being developed with the BSI standards body will complement the green taxonomy work of the European Union’s High-Level Expert Group (HLEG) on Sustainable Finance.
The government — in written evidence to a House of Commons inquiry into green finance – says its new Green Finance Taskforce is “complementary to the work being carried out by the HLEG”, in a rare sign of alignment with the EU despite Brexit.
“Six of the 20 members of the HLEG,” it notes, “are based in the UK, and several Taskforce members also participate in the HLEG.”
The joint submission to the Parliament’s Environmental Audit Committee, from the Treasury and the Department for Business, Energy and Industrial Strategy (BEIS), said this “overlapping membership ensures an effective two-way information flow, strengthening the evidence base for both groups and avoiding duplication of work”.
The submission added that efforts to “align” the EU and UK green finance agenda have already positively translated into more “targeted UK green finance policy”.
It cited the fact that the UK has commissioned the British Standards Institution (BSI) to develop what it says are “the world’s first green finance management standards”.
The evidence stated: “The BSI will specifically not be developing ‘green’ taxonomies as part of this work, in recognition of the progress already being made in this area by the EU HLEG.”The government announced in September that it was working with the BSI to develop a new set of voluntary green and sustainable finance management standards. The first standard would be in production by the first half of 2018.
The committee, chaired by opposition MP Mary Creagh, yesterday took oral evidence from a range of experts about climate risk disclosure and the duties of pension funds in managing environmental risk as the UK looks to become – in the words of the government – “a world centre for green finance”.
Witnesses included Alice Garton (Client Earth), Dr Ben Caldecott (Oxford Sustainable Finance Programme) and Russell Picot (HSBC Pension scheme). Also speaking were Diandra Soobiah (NEST) and Emma Howard-Boyd (Environment Agency).
The Principles for Responsible Investment (PRI) also provided written evidence, in which it called for a “risk reduction mechanism for green infrastructure investing” and the possibility of a long-dated sovereign green bond to cover the construction risk for green infrastructure.
Caldecott made the case for a public-private collaboration on green fintech to help London extend its lead in sustainable finance and investment as centres worldwide compete to be green finance leaders.
The Green Finance Taskforce will deliver its final report in the spring.
With reporting by Vibeka Mair.