The chair of the UK’s green taxonomy advisory group (GTAG) has warned that progress on the UK’s green guidelines could be slowed to ensure that the country “gets it right first time”.
Speaking at RI Europe, Ingrid Holmes, who is an executive director at the Green Finance Institute and chairs GTAG, said that while screening criteria for climate adaptation and mitigation will be in place by January 2023, “it makes sense to slow it up and get it right the first time”. She also warned that publication of criteria for other environmental areas such as biodiversity and water usage could be delayed. The initial consultation will be published by the Treasury “soon”, she said, adding that GTAG would be publishing a summary of its advice. She also stressed the importance of publishing the consultation and gathering responses as soon as possible.
On a positive note, Holmes said the UK was benefitting from not being the first mover in taxonomy creation, adding that there was no need to “rip up” the EU’s version and start from scratch.
At the same time, she highlighted the potential for divergence between the EU and the UK on the contentious issue of nuclear and gas.
Under proposals put forward by the European Commission in February, both fuels could be considered taxonomy-compliant. Speaking the day after members of the European Parliament’s committees for economic and monetary affairs and the environment voted narrowly in favour of vetoing the proposals, Holmes said GTAG had recommended that unabated gas should not be included in the UK taxonomy. This is in line with the UK’s climate change committee’s recommendation that unabated gas be phased out by 2035.
The conversation regarding nuclear was “less straightforward”, she said, adding that nuclear could meet “do no significant harm thresholds” with stringent health and safety standards.
However, Holmes admitted that the taxonomy was “ultimately political”. It has been reported that business secretary Kwasi Kwarteng is “keen” to see natural gas included, and a UK government spokesperson told Responsible Investor that there is “strong evidence for the inclusion of nuclear”.
Holmes also warned that implementing a social taxonomy could be more difficult than a green one. Taxonomies focus on economic activity, she said, whereas social is an entity-level approach. Emphasising that taxonomies are “a tool, not the tool”, she added that just transition indicators may not be best served by a social taxonomy.
In a separate panel, a member of the European Commission’s platform on sustainable finance warned of further delays to the EU’s social taxonomy following the wrangling over the inclusion of nuclear and gas in the green taxonomy. While the platform published its report on a conceptual framework for the taxonomy in February, Aleksandra Palinska, senior research and advocacy officer at Finance Watch, said that “from the European legislative standpoint unfortunately right now we are a little bit nowhere”.
“[The nuclear and gas debate] created such a big sensitivity around anything that has to do with a taxonomy […] that unfortunately the European commission right now is not going to put forward immediately any legislative measures,” she said.