The UK government delayed its response to the US Inflation Reduction Act and the EU's green subsidy plans until the autumn, but set out plans to eradicate greenwashing in the financial sector.
In an update to its Green Finance Strategy first published four years ago, the Treasury and departments for energy security and environment said the new plans "will ensure market participants have the information and tools they need to align to our climate and nature goals" with the aim that the country will become "the world’s first net zero-aligned financial centre".
This was published alongside its 'green day' plan, branded 'Powering Up Britain', to set out actions to achieve energy security and net zero objectives.
As well as publishing a consultation on environmental, social and governance (ESG) ratings providers, the Green Finance plan included lots of promises to do more planning and consulting, including setting out the next steps in net zero transition planning, including a market review into how the UK can become the best place in the world for raising transition capital, and a commitment to consult on the introduction of requirements for the UK’s largest companies to disclose net zero transition plans.
There was also a promise to deliver a green taxonomy to "a tool to provide investors with definitions of which economic activities should be labelled as green", which will, following up on Chancellor Jeremey Hunt's budget announcement, is expected to include nuclear energy.
Most of these have been pencilled in for 'autumn/winter 2023'.
The announcement was "little more than a restatement of existing commitments" and "lacking the vision and ambition needed to align the financial sector with the government’s own ambition of reaching net zero" said Lewis Johnson from investor activist group ShareAction.
Autumn promises represented further delays for some of the promised commitments, Johnson said, adding it is "vital that the government introduces a science-based green taxonomy as soon as possible".
On the plus side, he said the ESG consultation was a "positive step" and the regulatory framework review of stewardship and the government’s acknowledgement that pension scheme trustees’ fiduciary duties must be reviewed were also steps in the right direction.
Rohan Malik at EY said the announcements were more aspirational than a genuine leap forward.
He said: "The government’s decision to delay its response to the US and EU green subsidy plans until the autumn is a missed opportunity for the UK to set out its stall with a framework that provides a stable, favourable investment clean technology environment.
"With a lack of clarity on how it intends to attract green capital, the UK risks spending time watching investors, jobs and our own homegrown clean technology companies flow towards the US and EU."