Chancellor Rishi Sunak has today announced plans to introduce new rules to force firms to reveal their impact on the climate.
Speaking at Mansion House, Sunak announced that businesses across the economy will have to report on the impact they are having on the climate and environment.
“We’re launching new requirements for businesses and financial products to disclose sustainability information” Sunak said, as he addressed leaders in the financial services industry.
“We will reaffirm the UK’s position as the best place in the world for green finance.”
The new rules, called integrated “Sustainability Disclosure Requirements”, are mainly targeted at financial services firms and their investment products.
Sunak did mentioned that other companies would have to comply with the rules, but did not specify which.
The new rules could soon be brought into law after the government said it would “legislate to deliver this and will set out its approach to green finance regulation ahead of COP26” in a separate press release.
Laura Houet, financial services partner at law firm CMS, says: “The aim to be a leader in sustainable finance remains highly encouraging.”
“Not only is the government focussing on clear and mandatory disclosures on climate risks, but is pushing for an additional, more constructive step for financial institutions to commit to achieving net zero.”
Sunak also said the UK had still not reached a post-Brexit financial services agreement with the EU.
He elaborated on plans to issue £15bn in green bonds through the NS&I, allowing the public to invest in renewable energy projects. The products are said to be the world’s first ever sovereign green bond.
Details on what types of projects the government will invest in using the funds were revealed yesterday. However, the interest rate the bonds will offer has yet to be announced.
Sunak sets out post-Brexit road map for financial services
Sunak also set out his post-Brexit roadmap for the UK’s financial services industry.
The Chancellor said he would introduce several reforms to make the UK’s financial services industry more competitive.
“We’re consulting on reforms to the regulation of wholesale capital markets” he said, adding that the government is “implementing the recommendations in Lord Hill’s listings review, including a fundamental review of our prospectus regime.”
Sunak said the government is considering new measures intended to “boost our competitiveness across both regulation and tax.”
Miles Celic, chief executive officer of the TheCityUK, says: “Rishi Sunak is right to put openness, competitiveness, world leading technology and green finance at the heart of his vision for financial services. Our industry is a dynamo that powers the rest of the economy and helps people in their everyday lives.”
His “commitment to affirming the UK’s leadership position in multilateral engagements and with global financial markets is welcome.”
“We also need to ensure a compelling proposition for the UK to remain a world leading international financial centre. That means working in partnership with industry and regulators to develop a cross-governmental strategy to bolster the industry’s competitiveness.”
Claire Tunley, chief executive officer of the Financial Services Skills Commission, says: “Technological transformation is already disrupting the financial services sector and requires specific tech skills to meet this growing demand.”
“This will only increase with further innovation and digitisation. Tackling this skills gap and boosting the supply of relevant skills is essential to ensure the sector’s future success.”