John Glen, the economic secretary to the UK treasury, has confirmed the UK’s intent to, “at the very least”, match the ambition of the European Union’s sustainable finance action plan despite current events such as the pandemic and the state of the global economy.
Addressing a conference organised by the Investment Association on Monday, he said: “Recent events have illustrated just how vital this agenda is. Although tackling COVID-19 remains the government’s priority, having thrown into sharp relief the importance of the S in ESG, the climate crisis hasn’t gone away, and it is more important than ever that we take environmental, social and governance factors into account as we rebuild our country.”
He noted the UK’s “ambition for inter-operable global standards to drive forward the transition to net zero while providing the opportunity for UK asset managers to become global leaders in this field – capturing the opportunity from green finance within the UK market”.
He said he would disclose more initiatives the UK is taking in order to match the ambition of the EU’s action plan “in due course”.
Glen added that sustainability and responsible investment continued to be at the top of his agenda, and said the investment management sector’s work in this area would also be important as the UK “looks to deepen” its relationship with international partners.
Following the Financial Reporting Council’s revised UK Stewardship Code which took effect on 1 January 2020, Glen said he would continue to encourage the asset management sector to adopt it.
“We want to help asset managers become effective stewards on behalf of clients by holding the companies they invest in to account,” he said.
He also highlighted the UK’s commitment to reach net zero by 2050: “The UK was the first major economy to make such a pledge, and the Treasury is now conducting a review on how best to fund the transition to net zero.”
Furthermore, he called for more action from the investment management industry as it played a crucial role “in addressing these issues through the development of responsible investing”.
“For our climate, there is more for you to do in making your own net zero commitments; by supporting accurate disclosures through TCFD (Task Force on Climate-Related Financial Disclosures), financing green projects, and moving away from the polluting growth models of the past,” he said.