The UK government has decided not to introduce a green taxonomy, saying it would focus on policies that industry feedback indicated would have a greater impact.
In a note about the outcome of its consultation, Emma Reynolds, economic secretary to the Treasury and City minister, said that, “after careful consideration, the government has concluded that a UK Taxonomy would not be the most effective tool to deliver the green transition and should not be part of our sustainable finance framework”.
Investment groups were split about whether the government should go ahead with a taxonomy, and, according to the government, while there was some positive sentiment, “the distinct value of a UK taxonomy over and above other policy was not clear”.
Last month, the government launched a trio of consultations on sustainability reporting, and Reynolds said these “demonstrate that we are working in partnership with industry to deliver on our plans to make the UK a global hub for green and transition finance activity”.
Financial services sector plan
The decision about the taxonomy was included in a financial services “growth and competitiveness” plan that the UK chancellor presented in Leeds today ahead of her annual Mansion House speech.
The Chancellor set out the so-called ‘Leeds Reforms’ today ahead of her annual Mansion House speech
The wide-ranging sector plan is a key part of the government’s modern industrial strategy and aims to “position the UK as the number one destination for financial services companies by 2035”.
HM Treasury has said that boosting the competitiveness of the country’s financial services is “at the heart of the government’s plan to grow the economy and put more money in people’s pockets”.
With regards to asset management, the government said it would pursue three core objectives: placing portfolio management at the heart of policymaking, making the UK a world leader for managing private markets assets, and delivering “a future-proofed regulatory regime for asset management and champion innovation”.
The government is banking on plans to build a retail investment culture, with the UK reportedly having the lowest level of retail investment among G7 countries. One of the steps it has in mind is allowing Long Term Asset Funds to be held in stocks and shares investment savings accounts next year.
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