Explained: UK’s aim to be first ‘net zero-aligned financial centre’
Chancellor outlines plans but campaigners warn of ‘greenwashing’
It’s finance day today at the Cop26 climate summit and Rishi Sunak has outlined the government’s plan for the UK to become the world’s first “net zero-aligned financial centre”.
The chancellor arrived in Glasgow carrying a green version of the traditional red budget briefcase and addressed an audience of finance ministers, central bank governors and senior industry leaders.
Sunak told delegates it was “easy to feel daunted by the scale of the challenge we face” but is optimistic that Cop26 will bring together leaders to “direct the world’s wealth to preserve our planet”, Yahoo Finance! reported.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
Net zero finance centre: how would it work?
Sunak said the UK will “go further” in the climate fight by becoming the first net zero-aligned financial centre. “This means we are going to move towards making it mandatory for firms to publish a clear, deliverable plan setting out how they will decarbonise and transition to net zero with an independent task force,” he said.
Most big UK firms and financial institutions will be forced to show how they intend to hit climate change targets, under proposed Treasury rules, the BBC reported. By 2023 they will have to set out “detailed public plans for how they will move to a low-carbon future” and an expert panel will “set the standards the plans need to meet to ensure they are not just spin”.
In a statement The Treasury explained that next year the UK will publish a “transition pathway” for the financial sector to achieve the 2050 net zero goal. The “comprehensive plan” will give the sector the “information they need to take climate into account in every financial decision”.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
‘Greenwashing’ the financial sector?
Sunak hopes to “rewire the entire financial system” to help protect the climate. However, any commitments will not be mandatory and green groups have said this is not enough, the BBC reported.
The Guardian’s environment correspondent Fiona Harvey said there’s “widespread concern” that Sunak has “missed the opportunity to make a real change” to the way businesses and financial institutions operate when it comes to the climate and net zero.
Jennifer Larbie, Christian Aid’s UK advocacy and policy lead, welcomed that the chancellor recognises London’s financial sector as “critical to any meaningful progress” towards a global net zero. But the announcement “does little to shift the dial now on the trillions still flowing into fossil fuel projects every day”. She added: “The UK government must mandate the financial sector to act with urgency to end fossil fuel investments.”
Campaigners have also warned that the chancellor’s plan falls short of what is needed to halt the climate crisis and risks amounting to no more than “greenwash” for a sector which has profited massively from decades of pollution, The Independent reported.
Greenpeace UK accused Sunak of going to Cop26 with “a marketing slogan” instead of taking transformative action. Rebecca Newsom, Greenpeace UK’s head of politics, said the new rules seem to allow “plenty of wriggle room for financial institutions to continue with business as usual, rather than ‘rewiring’ the system as the chancellor claims”. She added: “The chancellor is once again falling short of what the climate emergency requires.”
-
At least 95 dead in Spain flash floods
Speed Read Torrential rainfall caused the country's worst flooding since 1996
By Peter Weber, The Week US Published
-
Earth's carbon sinks are collapsing
Under the Radar Forests and soil are not operating as usual
By Devika Rao, The Week US Published
-
Why the Earth's water cycle is under threat
Under The Radar Disturbances in the system that moves water around the world place more than half of global food production at risk
By Chas Newkey-Burden, The Week UK Published
-
Climate safe havens may be a thing of the past
Under the radar Safe spaces are few and far between
By Devika Rao, The Week US Published
-
What does marine life do during a hurricane?
The Explainer The underwater ecosystem also faces deadly consequences
By Devika Rao, The Week US Published
-
Wildlife populations drop a 'catastrophic' 73%
Speed Read The decline occurred between 1970 and 2020
By Peter Weber, The Week US Published
-
An iconic ship is being turned into the world's largest artificial reef
Under the Radar The SS United States will be sunk off the coast of Florida if all goes to plan
By Justin Klawans, The Week US Published
-
It's not just ice quantity that climate change affects. It's also quality.
Under the Radar Ice is getting thinner and frailer
By Devika Rao, The Week US Published