HM Treasury Establishes New Group on Green Investments Advisory
HM Treasury announced the appointment of the Green Technical Advisory Group, which is a new independent expert group to advise government on standards for green investment. The Green Technical Advisory Group will oversee the delivery of a Green Taxonomy, which is a common framework setting the bar for investments that can be defined as environmentally sustainable. The Group will first meet in June 2021 and is expected to run for at least two years. It will provide initial recommendations to the government in September 2021. The launch of the Group comes shortly after the UK has been instrumental in getting G7 countries to move toward making climate disclosures mandatory across their respective economies, in line with recommendations from the Task Force on Climate-Related Financial Disclosures (TCFD). HM Treasury, FCA, BoE, and other relevant government departments and regulators will be observers to the Group.
The Green Technical Advisory Group will be chaired by the Green Finance Institute and will comprise financial and business stakeholders, taxonomy and data experts, and subject-matter experts drawn from academia, NGOs, the Environment Agency, and the Committee on Climate Change. The role of the Group will be to provide non-binding advice to government on market, regulatory, and scientific considerations for developing and implementing a UK Taxonomy, which will facilitate more informed investment decisions. This includes advising on:
- Approach to developing a UK Taxonomy that is usable and practicable for financial and non-financial firms
- UK Taxonomy requirements which drive informed decision-making for investors whilst placing a proportionate burden on business
- Drawing together scientific and subject matter expertise to assist Government in determining technical screening criteria. The technical screening criteria will be subject to appropriate, open consultation prior to making.
- Rationale, implications, and recommendations for any deviations from existing international frameworks or taxonomies
- Dealing and Managing any data gaps
- How the UK Taxonomy can best support the UK’s transition to Net Zero
- How the UK Taxonomy could be used to align and accelerate the delivery of wider Government policy, including its net zero strategy, green finance strategy, and 25 Year environment plan
- Role that UK Taxonomy could play in tracking green financial flows
During the first 12 months, the Group will meet on a quarterly basis undertaking work, as needed, in between these meetings. Additional ad hoc meetings may be convened if deemed necessary. Outputs will consist of a series of issues papers developed to fulfil the agreed scope of work. These will be delivered according to an indicative timetable agreed after the inaugural meeting of the Group. In addition to this strategic group that will advise on cross-cutting issues, sub-groups will be established, where appropriate, to provide specific technical expertise on a given sector (for example, on energy). Sub-groups will include additional technical experts to those in the strategic group.
Keywords: Europe, UK, Banking, Green Taxonomy, Climate Change Risk, ESG, GTAG, Sustainable Finance, Taxonomy, HM Treasury
Michael Denton, PhD, PE
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.
Credit analytics expert helping clients understand, develop, and implement credit models for origination, monitoring, and regulatory reporting.
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