UK Govt announces green taxonomy delay

Written by Adam Cadle

14/12/2022

The UK Government has today announced a delay in the implementation of the country’s green taxonomy.

The Treasury Lords Minister Baroness Penn said: “The Government is clear that the value of a taxonomy rests on its credibility as a practical and useful tool for investors, companies, consumers and regulators in supporting access to sustainable finance. These are long-term matters and it is important to proceed carefully. Having received advice from the Green Technical Advisory Group, and following stakeholder engagement, the Government believes that there is a benefit in reviewing its approach to taxonomy development to maximise the effectiveness of our sustainable finance agenda. Therefore, the Government will not make secondary legislation under the Taxonomy Regulations this year.”

Penn added that the Government will provide a further update as part of its publication of the Green Finance Strategy in early 2023.

Responding to the announcement, UKSIF CEO James Alexander said: “The Government has today announced a delay to the implementation of the UK's green taxonomy without giving a clear indication on the timeline for publication or next steps. Following a lack of clarity over the future direction of the UK’s taxonomy throughout this year, we are naturally hugely disappointed by this development.

“The UK’s taxonomy remains very important for investors and companies seeking clarity on how to align their activities with net-zero, and it closely underpins other key components of the UK’s future sustainable finance regulatory framework, including the upcoming investment labels system.

“We urge the Government to restate its intention to swiftly deliver a science-based taxonomy and a clear timeline for implementation, following through on the UK’s commitments made in the ‘Greening Finance Roadmap’. This would help prevent the UK from falling behind the EU and other jurisdictions in its leadership on sustainable finance.”

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