Her Majesty's Treasury (HMT) published a policy paper that sets out the government’s vision for open, green, and technologically advanced financial services sector. The government’s vision is shaped around four key themes: an open and global financial hub, a sector at the forefront of technology and innovation, a world-leader in green finance, and a competitive marketplace promoting effective use of capital. HM Treasury also published remarks from the Chancellor on the next steps the government is taking to deliver its vision for the future of financial services in the UK. HM Treasury also published a number of consultations that take forward this strategy for future of financial services sector as well as a response to its call for evidence on Solvency II.
To position the financial sector at the forefront of technology and innovation, the government will support and facilitate safe adoption technologies, such as cryptoassets and stablecoins, and develop a new sandbox for the financial market infrastructure. Furthermore, toward its vision of becoming a world-leader in green finance, the government will:
- Use the UK’s international leadership of COP26 to build a global financial system that mobilizes private finance to support the re-engineering of economies for net zero. This will ensure every professional financial decision takes climate change into account.
- Rally the financial services sector to commit to net zero through membership of the Glasgow Financial Alliance for Net Zero. The government will also work closely with the regulators to encourage and support firms to publish transition plans and will provide further details before the end of 2021.
- Combat greenwashing with common and transparent definitions of sustainable activities and investments. To deliver this, the government has established the Green Technical Advisory Group to provide advice on the implementation of the UK Green Taxonomy.
- Require businesses to disclose their risks and opportunities from, and impact on, the climate and the environment through implementing integrated sustainability disclosures requirements. This economy-wide regime will cover real-economy corporates, financial services firms, and pension schemes. The government will work closely with the regulators to ensure strong coordination and a coherent approach across the economy, and will publish a roadmap setting out its approach to sustainability disclosures ahead of COP26.
- Enable consumers to quickly and easily see the environmental impact of their investments. The government will work with the FCA to introduce a sustainable investment label. This will cover retail investments using information provided through the sustainability disclosures requirements.
- Position the UK as the leading global market for high-quality voluntary carbon offsets. This effort will be led by Dame Clara Furse’s newly established UK Voluntary Carbon Markets Forum.
Keywords: Europe, UK, Banking, Insurance, Securities, Climate Change Risk, ESG, Green Taxonomy, COP26, Sustainable Finance, Regtech, Disclosures, HM Treasury
Dr. Denton provides industry leadership in the quantification of sustainability issues, climate risk, trade credit and emerging lending risks. His deep foundations in market and credit risk provide critical perspectives on how climate/sustainability risks can be measured, communicated and used to drive commercial opportunities, policy, strategy, and compliance. He supports corporate clients and financial institutions in leveraging Moody’s tools and capabilities to improve decision-making and compliance capabilities, with particular focus on the energy, agriculture and physical commodities industries.
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