I am strongly encouraged by the Government’s vision for the future of Britain's financial services sector shaped around four key themes, including the determination to make the UK a world-leader in green finance.
I also welcome the new environmental sustainability and net zero remits which have been granted to the Bank of England's Monetary Policy Committee and Financial Policy Committee. I believe that the amended objectives, which emphasise sustainable growth consistent with the transition to a net zero economy, will be essential in helping mobilise innovation and finance in the protection of our environment and fight against climate change.
The UK recently issued the UK’s first ever Sovereign Green Bond, becoming the first country in the world to make Taskforce on Climate-Related Disclosures mandatory by 2023. I was excited to see the Chancellor unveil a roadmap for sustainable investing which includes details on Sustainability Disclosure Requirements and a new UK Green Taxonomy which will create a shared understanding of which economic activities are classed as green.
I am proud that the UK has also used its chair of the G7 to broker an agreement to move towards making climate disclosures mandatory across their respective economies.
The Government has also announced its intention to enable the new UK Infrastructure Bank (UKIB) to provide financing for strategic and high value net zero projects and crowding in private sector investment for such projects. The UKIB will also build an expert advisory service to assist local authorities with the development and financing of green infrastructure.
I also welcomed the intention to make the UK the world’s first Net Zero-aligned Financial Centre, requiring UK financial institutions to have firm-level transition plans setting out how they will decarbonise, coupled with strong oversight of the financial sector to ensure financial flows actually shift towards supporting net zero. I understand that the UK will move towards making publication of transition plans mandatory and that the Government will set up a high-level Transition Plan Taskforce. A transition pathway for the financial sector will set out how the sector will transition to net zero by 2050.
Moreover, the International Financial Reporting Standards (IFRS) Foundation has announced the establishment of an International Sustainability Standards Board (ISSB). The IFRS Foundation will thereby consolidate the Value Reporting Foundation and the Climate Disclosure Standards Board to develop comprehensive global baseline sustainability reporting standards with public oversight.
The IFRS Foundation has published two prototype standards to build on existing frameworks, including the Task Force on Climate-Related Financial Disclosures (TCFD), when developing new standards. These standards will be subject to full public consultation, can be considered for adoption by jurisdictions on a voluntary basis, and jurisdictions will have their own legal frameworks for adopting, applying or otherwise making use of these international standards.
Finance Ministers and Central Bank Governors from 40 jurisdictions and from 6 continents joined the UK in welcoming this announcement of the establishment of the ISSB and its work to develop consistent and reliable baseline standards for disclosure of sustainability-related information.
Finally, please be assured that I know that my colleagues at the Treasury are committed to ensuring that the financial system plays a major role in the delivery of the UK’s net zero target and ambitions for a ‘nature positive’ future at home and abroad.