As the appetite for sustainable investment grows, the UK has set out to create a common framework, setting the bar for investments that can be defined as environmentally sustainable.
The Green Taxonomy is designed to clamp down on unsubstantiated or exaggerated claims that an investment is environmentally friendly – and make it easier for investors and consumers to understand how a firm is impacting the environment.
The group behind the move says hundreds of new sustainable investment funds are coming to market each year and sales to UK retail investors tripled between 2019 to 2020. It says consumers and investors will be better informed, and businesses will be supported as they transition to net zero.
The Green Taxonomy should boost investment in projects that accelerate the transition to a sustainable economy, create green jobs and support the UK’s environmental goals.
Chaired by the Green Finance Institute, the Green Technical Advisory Group (GTAG) will provide independent, non-binding advice to the government on developing and implementing the framework.
John Glen, Economic Secretary to the Treasury, said, “We want investors and businesses to play their part in greening our economy and transitioning to net zero, so it’s crucial we have a clear common definition of what green means.
“A UK green taxonomy will provide better data on the environmental impact of firms, supporting investors, businesses and consumers to make green financial decisions and accelerating the transition to net zero.”
