Britain unveils green plan for post-Brexit finance

London

BRITAIN demanded on Monday that companies reveal the impact of climate change, as it unveiled its first sovereign green bond under measures to help it reach net zero carbon emissions by 2050.

Finance minister Rishi Sunak pledged his plan would also help retain Britain's role as a premier global financial hub after Brexit, and help economic recovery from the coronavirus fallout. The measures, he said, would "extend the UK's global leadership in green finance ahead of hosting COP26", the United Nation's global climate change summit to be held in Glasgow next year.

The financial services industry "will be essential to our economic recovery from coronavirus, creating jobs and growth right across our country", he told parliament.

The UK government aims to meet the Paris climate agreement goal of net zero carbon emissions by 2050. Britain has sunk into a historic recession as a result of the Covid-19 pandemic, stoking fears of a double financial hit as the full effect of Brexit comes into force on Jan 1, 2021.

The country left the European Union in January this year after nearly 50 years of often reluctant integration. But it remains bound by its rules until the end of this year, as it battles to secure terms for a new trade deal with the 27-member bloc. Negotiators resumed talks in London on Monday, with both sides deadlocked in disagreement over key areas such as fishing rights and competition rules.

Mr Sunak told lawmakers that Britain's departure from the EU was "an opportunity to set out a new vision" for financial services.

"A vision based not on a race to the bottom, but for a financial services industry that is open, is innovative, and leads the world in the use of green finance," he said.

The UK government wants to compel prominent British firms to disclose how climate change is affecting their business, with effect from 2025.

The new rule will apply to all listed commercial companies, large private firms, banks, insurance companies, asset managers and pension schemes. The data will help companies and investors assess the financial impact of the climate crisis - and aid the nation's transition to a carbon neutral economy.

Mr Sunak also revealed the government would launch a green sovereign bond to fund environmental projects, mirroring a popular EU policy that already exists in France and Germany. More green bonds will be issued if there is sufficient demand, the chancellor of the exchequer added.

He also welcomed work by his Treasury department and the Bank of England (BoE) to consider whether and how central banks could issue their own digital currencies, as well as cash.

The BoE welcomed the announcement, which came after the central bank laid out its own green initiative. Its governor Andrew Bailey announced earlier that it will next year test the exposure of Britain's commercial lenders to climate change risks, under an assessment delayed by Covid-19.

The exercise, which will take place in June, will assess "three different climate scenarios, testing different combinations of physical and transition risks over a 30-year period" for UK lenders, he said a virtual summit on green finance. AFP