Financial service firms are going to be required to report on the impact they’re having on the climate and environment, under new proposals outlined by UK chancellor Rishi Sunak.
The government intends to legislate to deliver these integrated sustainability disclosure requirements and will set out its approach to green finance regulation ahead of COP26. It will also work with the Financial Conduct Authority (FCA) to create a new sustainable investment label. This will be designed so consumers can compare the impacts and sustainability of their investments.
In his first Mansion House speech as chancellor, Sunak said: “We’re issuing the UK’s debut sovereign green bond in September, with the framework published yesterday committing us to the most ambitious approach of any major sovereign.
“We’re launching new requirements for businesses and financial products to disclose sustainability information. And creating a global market for high quality voluntary carbon offsets, with thanks to Dame Clara Furse’s leadership.
“And on the international stage, as we push for global action ahead of COP26, we’ve persuaded all G7 economies to move towards making climate disclosures mandatory. A clear demonstration of international cooperation delivering tangible solutions to pressing global problems.”
In addition to the sovereign green bond, the government will be launching a “world-first” green savings bond offered by the state-owned savings bank National Savings and Investments (NS&I), with projects like zero emissions buses, offshore wind and schemes to decarbonise homes and buildings eligible for funding.
The government has also launched a consultation that outlines its plans for new laws to make sure people only need to travel a “reasonable distance” to pay in or take out cash. This will go alongside the legislation that has already been passed to enable cashback without a purchase.
Alongside this, Sunak announced consultations on reforms to the regulation of wholesale capital markets with the aim of boosting the UK’s “competitiveness across both regulation and tax”. There will also be a review of the prospectus regime, which will cover the rules governing the information companies must publish when raising finance to “make it simpler, more agile and more effective”.
Additionally, he announced he had signed an “ambitious financial services partnership with Singapore. In his speech, he added: “A practical demonstration of our commitment to the Indo-Pacific tilt.
“We’re also negotiating a ground-breaking deal with Switzerland - the most ambitious financial services agreement ever attempted. And I will always defend the global norms of open markets such as delegation of portfolio management.”