The financial sector and the UK’s net zero transition

Environmental Audit Committee Closed Inquiry
Opened: 30 May 2022 Closed: 23 May 2024 Parliament page
The EAC is examining the role of financial institutions, including UK signatories to the Glasgow Financial Alliance for Net Zero, in winding down the financing of fossil fuel extraction and promoting the transition to green energy in pursuit of the Government’s climate and environment targets. Read the call for evidence … Read more
22 Recommendations
10 Conclusions
1 Report
4 Oral sessions
8 Letters
4 Events
Activity timeline 18 events
23 May
2024
Correspondence
23 Feb
2024
Report published
23 Feb
2024
Correspondence
29 Nov
2023
Report published
20 Jun
2023
Correspondence
19 Jun
2023
Correspondence
18 May
2023
Oral evidence
18 May
2023
Formal meeting (oral evidence session) · Room 16, Palace of Westminster
30 Mar
2023
Correspondence
30 Mar
2023
Correspondence
8 Mar
2023
Oral evidence
8 Mar
2023
Formal meeting (oral evidence session) · Room 15, Palace of Westminster
Oral evidence sessions 4 sessions
18 May 2023
View on parliament.uk
panel one
Amy Jenkins · Department for Energy Security and Net Zero Fayyaz Muneer · HM Treasury The Baroness Penn · HM Treasury The Lord Callanan · Department for Energy Security and Net Zero Zoe Norgate · Department for Energy Security and Net Zero
8 Mar 2023
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panel one
Michael Marks · Legal and General Investment Management Roslyn Stein · AXA Steve Waygood · Aviva Investors Tim Lord · HSBC UK
14 Dec 2022
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panel one
Dr Anastasiya Ostrovnaya · Imperial College Business School Mark Campanale · Carbon Tracker Initiative Ryan Jude · Green Finance Institute Sam Alvis · Green Alliance
24 Oct 2022
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Panel 1
Mark Carney · United Nations
Title HC No. Published Items Response
First Report - The financial sector and the UK's net zero transi… HC 277 29 Nov 2023 32 Responded
Recommendations & Conclusions
11 results
Clear
3 Conclusion Accepted
First Report - The financial secto…
Private banks continue substantial fossil fuel financing despite Paris Agreement pledges.
We have heard during our inquiry that despite the pledges set out and agreed upon by global governments in the Paris Agreement, private banks have financed trillions of US dollars into fossil fuels. New UK fossil fuel Initial Public Offerings … Read more
Government Response
The government reiterates its commitment to net zero and energy security, stating its mission to replace fossil fuels with renewables and nuclear energy. It highlights its strong track record in attracting green investment, citing specific programmes, funding, and action plans aimed at accelerating the clean energy transition.
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6 Recommendation Accepted
First Report - The financial secto…
Publish quarterly reports on UK energy independence, net zero progress, and scope three emissions.
We recommend that the Government publish quarterly reports to show how the UK is moving towards greater energy independence while staying on track to meet its net zero target, including an assessment of the effect of scope three emissions on … Read more
Government Response
The government does not commit to publishing new quarterly reports, stating it already provides extensive detail on net zero and energy security progress through various annual and biennial reporting mechanisms, including updates on climate targets and net carbon accounts.
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21 Conclusion Accepted
First Report - The financial secto…
Progress in developing blended finance models for net zero projects is welcomed.
We welcome the Government’s progress in developing blended finance models for net zero projects, in particular the work of the UK Infrastructure Bank (UKIB) which, according to the evidence given to us by the Minister, has created around £4 of … Read more
Government Response
The government highlights the recently announced Net Zero Blended Finance Project (November 2023), which aims to improve government capacity and explore innovative blended finance approaches to mobilise private sector investment for net zero technologies, working with the UK Infrastructure Bank.
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23 Recommendation Accepted
First Report - The financial secto…
Publish the next round of net zero sector investment roadmaps without delay
We welcome the many net zero sector roadmaps that the Government has published and plans to publish, which should provide investors with the detail they require to help their investments align with the Government’s net zero target. We particularly welcome … Read more
Government Response
The government confirms the publication of several net zero investment roadmaps, including civil nuclear in January 2024 and the Advanced Manufacturing Plan in November, and commits to publishing a hydrogen investor roadmap update in February 2024 and a nature roadmap by the end of 2024.
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24 Conclusion Accepted
First Report - The financial secto…
Government exploring methodologies for tracking net zero and nature financial flows
Understanding levels of investment across the economy is vital for knowing whether the UK is on track to meet its climate and nature targets. That is why we welcome the work underway by the Government to explore methodologies for tracking … Read more
Government Response
The government recognises the importance of tracking investment flows and details ongoing efforts, including the concluded scoping phase of the UK Landscape of Climate Finance (LCF) research and research into tracking private finance for nature's recovery. It states it will begin gathering data this year against targets for nature finance.
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26 Recommendation Accepted
First Report - The financial secto…
Launch promised consultation on global voluntary carbon markets without further delay
We applaud the UK Government and civil society for leading the way in building a global voluntary carbon market. We appreciate the difficulty of achieving a global price for carbon, but it is ultimately needed to prevent a race to … Read more
Government Response
The government accepts the recommendation and states its intention to publish a consultation on voluntary carbon markets in early 2024. This consultation will seek views on government and regulatory interventions to enable market growth, endorse IC-VCM and VCMI outputs, and explore a new labelling scheme for UK credits.
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27 Recommendation Accepted
First Report - The financial secto…
Develop a UK Carbon Border Adjustment Mechanism to prevent carbon leakage
Having been a long-standing leader in climate finance, the UK now risks falling behind by failing to install mechanisms to mitigate carbon leakage. The EU has already launched its carbon border adjustment mechanism (CBAM). It is now over a year … Read more
Government Response
The government accepts the recommendation, stating it will implement a carbon border adjustment mechanism (CBAM) by 2027 to mitigate carbon leakage. A further consultation on the delivery of the CBAM will be conducted in 2024.
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28 Recommendation Accepted
First Report - The financial secto…
Maintain UK leadership in green finance and ensure global net zero policy alignment
The UK Government should be proud of its world-leading track record in supporting green finance initiatives. At the same time, it must neither be complacent nor lose momentum. The UK must continue to use its leadership position to bring other … Read more
Government Response
The government reiterates its commitment to net zero, highlighting its strong track record with significant investment in low-carbon energy sectors and a halving of emissions. They detail current actions like the Green Finance Strategy, £960m Green Industries Growth Accelerator, a £300m HALEU nuclear fuel program, and Transmission and Connections Action Plans to demonstrate continued momentum and leadership.
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29 Conclusion Accepted
First Report - The financial secto…
Local authorities hindered in green finance by fragmented funding and limited capacity
Local authorities have a significant role to play in green finance, from delivering grants at the household level, to collaborating with financial institutions on local net zero projects, and crowding in private capital for large scale projects. However, they are … Read more
Government Response
The government agrees on the importance of local authorities and outlines several initiatives to support them, including a £19m Local Net Zero Accelerator, Local Net Zero Hubs, UK Infrastructure Bank lending, and a commitment to simplify and consolidate funding, backed by the Funding Simplification Plan.
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30 Recommendation Accepted
First Report - The financial secto…
Increase overall funding envelope for the Boiler Upgrade Scheme, subject to uptake
We welcome the 50% increase permitted for individual grants under the Boiler Upgrade Scheme, and we would wish to see the overall envelope of funding increased subject to sufficient uptake. (Paragraph 162) The financial sector and the UK’s net ero … Read more
Government Response
The government confirms the increase in Boiler Upgrade Scheme grants to £7,500 and announces an additional £1.5 billion in funding for the scheme's extension from 2025-2028, directly addressing the call for an increased funding envelope.
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32 Recommendation Accepted
First Report - The financial secto…
Conduct a mapping exercise to target technical support for local authorities most in need.
We welcome the ongoing work to provide technical support and advice to local authorities, including through the Local Net Zero Hubs, UKIB, Net Zero Go, and the Local Net Zero Forum. We also welcome the Government’s intention to work with … Read more
Government Response
The government acknowledges variable capacity among local authorities but states existing support already considers technical assistance needs and Local Net Zero Hubs apportion resources based on regional priorities. They assert local authorities are best placed to assess their own needs, implying a rejection of a new mapping exercise.
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Government Response AI assessment · 32 of 22 classified
Accepted 11
Accepted in Part 1
Acknowledged 4
Deferred 10
Not Addressed 3
Rejected 3
Total 22 recs + 10 conclusions
Correspondence 8 letters
23 May 2024 To committee Letter from the Parliamentary Under Secretary of State for Energy Efficiency and Green Finance, and from the HM Treasury Minister for Green Finance, responding to the 23 February 2024 letter of the Committee regarding The financial sector and the UK’s net zero transition, dated 16 May 2024
Parliament page
23 Feb 2024 To committee Letter from the EAC Chair to the Treasury Lords Minister and the Minister for Energy Efficiency and Green Finance, concerning the Government's response to the EAC's report on The financial sector and the UK’s net zero transition, dated 23 February 2024
Parliament page
20 Jun 2023 To committee Letter from the Minister of State for Energy Security and Net Zero providing an update on the Celtic Sea leasing round, dated 15 June 2023
Parliament page
19 Jun 2023 To committee Letter from the Minister for Energy Efficiency and Green Finance (Department for Energy Security and Net Zero), relating to the 18 May 2023 evidence session on 'The financial sector and the UK’s net zero transition', dated 2 June 2023
Parliament page
30 Mar 2023 To committee Letter from the EAC Chair to the Co-Chair of the Glasgow Financial Alliance for Net Zero, regarding the 24th October 2022 'The financial sector and the UK’s net zero transition' hearing, dated 25 January 2023
Parliament page
30 Mar 2023 To committee Letter from the Co-Chair of the Glasgow Financial Alliance for Net Zero, responding to the Committee's letter of 25 January 2023, dated 23 March 2023
Parliament page
10 Nov 2022 Additional responses received to letters sent to signatories of the Glasgow Financial Alliance for Net Zero
Parliament page
18 Oct 2022 Responses received to letters sent to signatories of the Glasgow Financial Alliance for Net Zero
Parliament page