LONDON (Reuters) – Britain’s finance ministry set out plans on Thursday to meet its target of becoming the world’s first net-zero aligned financial centre, proposing measures to stamp out so-called green-washing in financial markets.
The ministry said in an update to its Green Finance Strategy “we will ensure market participants have the information and tools they need to align to our climate and nature goals”.
The ministry published a consultation paper on regulating raters of environmental, social and governance (ESG) aspects of companies, used by investors who want to put cash into sustainable assets.
Regulators want more transparency on ratings to help combat green washing, or inflated sustainability credentials. The sector is already developing an ESG Data and Ratings Code of Conduct on best practice.
Later this year, Britain will hold a public consultation on a taxonomy – a guide for investors on what constitutes sustainable investments – after the government paused work earlier this year to learn lessons from the European Union’s taxonomy.
“This will support the quality of standards, labels and disclosures used in the industry for green finance activity,” the ministry said in a statement.
“The government proposes that nuclear – as a key technology within our pathways to reach net zero – will be included within the UK’s Green Taxonomy, subject to consultation.”
In the fourth quarter, Britain will also consult on requirements for the largest companies to disclose their transition plans to net zero carbon emissions, if they have one, the ministry said.
(Reporting by Huw Jones; Editing by Bernadette Baum)
