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UK weighs mandatory climate reporting in green finance push
[LONDON] The UK said it's considering rules that force companies to disclose the risks they have related to climate change as part of a broader push to boost investment for green priorities.
The Treasury also called on the financial services industry to take the lead in stimulating investment for cleaning up energy and infrastructure in support of the government's measures to rein in climate change.
The Green Finance Strategy released by the government on Tuesday is aimed at delivering on goals endorsed by all the main political parties to reduce net greenhouse gas emissions to zero by 2050, a target that the UK was first in among G-7 nations to adopt. The reporting commitment would swing the UK's weight behind measures endorsed by Bank of England governor Mark Carney in his role as head of a global panel on financial stability.
"Climate change and the transition to a low-carbon economy will transform financial services markets," said Andrew Bailey, chief executive officer of the UK Financial Conduct Authority. "This brings unprecedented challenges for us in mitigating risks and enabling positive changes."
Pressure has been mounting on businesses to detail the climate impact of their investments. In May, BP plc investors voted in favour of the oil major reporting in detail about how its investments are compatible with the 2015 Paris climate accord.
As part of the plan the government intends to jointly fund the Green Finance Institute with the City of London to build the UK's reputation as a hub for sustainable investing. Separately a £5 million (S$8.6 million) Green Home Finance Fund will promote green mortgages and encourage homeowners to retrofit their homes to make them more efficient.
"By investing more in sustainable projects it can not only protect our environment, but also help establish London as the pre-eminent international centre for green finance," said John Glen, City Minister and economic secretary to the Treasury.