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UK will be the world’s first net zero financial centre

COP26: Day 3 update

With the world leaders departed from Glasgow, now the COP 26 summit delves into the detail, with a specific thematic focus each day. At Day 3 the focus has been on finance, with a number of pledges made, both by the UK government and well-known industry figures. 

Chancellor Rishi Sunak today set out his plans for the UK to become the world’s first net zero financial centre, as he pledged for the UK to be a leader on the world stage. Under the proposal there will be new requirements for UK financial institutions and listed companies to publish net zero transition plans that detail how they will decarbonise as the UK moves towards its goal of a net zero economy by 2050. While many businesses have already announced their plans, others will now need to start considering their plans before pressure is put on.  These rules will come into play in 2023, and businesses that don’t comply could face fines. The Chancellor commented on the announcement that the changes would mean "better and more consistent climate data; sovereign green bonds; mandatory sustainability disclosures; proper climate risk surveillance; and proper global reporting standards.” 

The Chancellor also committed to helping developing countries access finance for their own climate plans, with £100m to respond to recommendations from the UK co-chaired Taskforce on Access to Climate Finance. This brings the UK’s spend on initiatives to mobilise finance in emerging markets and developing economies to £576m. 

In addition, a new organisation, the International Sustainability Standards Board (ISSB) has been formed today. The ISSB’s aim will be to develop a comprehensive baseline of high-quality sustainable disclosure standards to support investors. This too, is likely to encourage public companies globally to take sustainability seriously as investors increasingly base decisions on the company’s commitment to adapt.