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
10 results
Clear
8 Recommendation Deferred
First Report - The financial secto…
Current 'comply or explain' transition plan disclosure rules are insufficient.
We welcome the Government’s intention to consult on requiring companies to disclose transition plans. However, the current “comply or explain” basis should be for an interim period only: a company can disclose by simply not having a transition plan, defeating … Read more
Government Response
The government is supporting the Transition Plan Taskforce (TPT) and will hold an upcoming consultation to consider the UK's approach to transition plans and the role of the TPT's Disclosure Framework, without committing to ending 'comply or explain'.
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9 Recommendation Deferred
First Report - The financial secto…
Deferring mandatory transition planning risks UK's green finance leadership position.
We agree with the Government that the operating environment will become increasingly difficult for those firms that do not set out their plans for contributing to net zero. However, we do not think it is enough to leave the issue … Read more
Government Response
The government established the Transition Plan Taskforce (TPT) to create a gold standard for private sector climate transition plans and will hold an upcoming consultation to consider the UK’s approach, including the TPT’s Disclosure Framework.
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10 Recommendation Deferred
First Report - The financial secto…
Mandate companies to develop and disclose transition plans in government consultation.
The Government’s consultation on requiring companies to disclose transition plans should include consideration of making it compulsory to have and to disclose a transition plan—not just if a company happens to have one—and the most suitable timetable for doing so. … Read more
Government Response
The government details existing work by the Transition Plan Taskforce and the FCA on transition plan disclosures. They state an upcoming consultation will consider the UK’s approach to transition plans, including the TPT Disclosure Framework and endorsement of ISSB standards, which will inform future policy but does not explicitly commit to making it compulsory to *have* a plan or mandatory reporting as the ultimate aim.
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11 Recommendation Deferred
First Report - The financial secto…
Introduce regulations ensuring companies follow Transition Plan Taskforce guidance for disclosures.
We welcome the publication of the Transition Plan Taskforce’s disclosure framework for transition plans, and the steps taken to achieve international alignment of that framework. We believe that those who publish transition plans should follow a compulsory framework, to ensure … Read more
Government Response
The government established the Transition Plan Taskforce (TPT) and will hold an upcoming consultation to consider the UK’s approach to transition plans and the role of the TPT’s Disclosure Framework, without committing to introducing regulations for compliance.
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12 Recommendation Deferred
First Report - The financial secto…
Set out consistent regulatory expectations and establish independent monitoring for organisations' net zero transition plans.
A plan is only effective if it delivers its contents. The Government should set out simple, consistent regulatory expectations for net zero transition plans and establish an independent mechanism for monitoring and evaluating and verifying organisations’ net zero transition plans, … Read more
Government Response
The government established the Transition Plan Taskforce (TPT) and will hold an upcoming consultation to consider the UK’s approach to transition plans and the role of the TPT’s Disclosure Framework, without committing to specific regulatory expectations or an independent monitoring mechanism.
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17 Recommendation Deferred
First Report - The financial secto…
Set out an SDR implementation timetable, commit to mandatory TNFD reporting, and phase in disclosures.
To maintain the UK’s global leadership in green finance reporting, the Government must keep up the momentum. We recommend that Ministers set out an overarching implementation timetable for the SDR, including for TNFD reporting, and commit to making TNFD reporting … Read more
Government Response
The government reiterates its commitment to Sustainability Disclosure Requirements (SDR) and confirms it will consider how best to incorporate the Taskforce on Nature-related Financial Disclosures (TNFD) recommendations into UK policy, deferring a commitment to a specific timetable or mandatory TNFD reporting.
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19 Recommendation Deferred
First Report - The financial secto…
Introduce UK green taxonomy with spectrum of definitions, monitor progress, and ensure mandatory status.
We recommend that the Government seek to introduce the UK green taxonomy as soon as possible. That taxonomy should include a spectrum of definitions—‘fifty shades of green’, as one of our witnesses put it. During the period of voluntary reporting … Read more
Government Response
The government commits to publishing a consultation on the UK Green Taxonomy shortly and will implement a voluntary disclosure period for at least two reporting years before considering mandatory obligations. It does not explicitly address the recommendation for a "spectrum of definitions" or quarterly progress reporting, nor does it commit to mandatory status within two years of the voluntary period.
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20 Recommendation Deferred
First Report - The financial secto…
Heed calls for a long-term institutional home for the UK green taxonomy.
It is unfortunate that, due to the delays to the introduction of the green taxonomy, the remit of the Green Technical Advisory Group expired before the testing period of voluntary disclosures could begin. We urge Ministers to heed the group’s … Read more
Government Response
The government acknowledges the Green Taxonomy Advisory Group's advice and states it will consider what external advice is required going forward, following a forthcoming consultation. It does not commit to establishing a long-term institutional home for the UK green taxonomy as urged by the committee.
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22 Recommendation Deferred
First Report - The financial secto…
Publish a single document detailing all blended finance models for net zero and nature
The Government must keep to its ambition of setting out its future plans for net zero blended finance solutions by the next spending review, and should include nature recovery projects within this suite of solutions. The Government should set out … Read more
Government Response
The government announced the Net Zero Blended Finance Project in November 2023, which aims to improve its capacity to explore innovative blended finance approaches and mobilise private investment for net zero technologies. However, the response does not explicitly commit to setting out future plans by the next spending review, including nature recovery projects, or consolidating all models into one document for cross-checking.
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25 Recommendation Deferred
First Report - The financial secto…
Establish formal mechanism by end of Parliament to track net zero and nature financial flows
We recommend that the Government go further and turn this research into a formal tracking mechanism by a date no later than the end of the current Parliament. The Government should task either an existing independent body, or create a … Read more
Government Response
The government acknowledges the need for tracking investment flows and states that the scoping phase for a UK Landscape of Climate Finance (LCF) model has concluded. It is now considering next steps, including the potential role of an independent body, and will begin gathering data on private finance for nature's recovery this year, but does not commit to a formal tracking mechanism by the end of the current Parliament.
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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