APPG on ESG publish The UK Green Taxonomy

I am really delighted to have had a small part to play in this extremely impressive Science-based UK Green Taxonomy. The global ESG agenda requires a classification tool that defines sustainable economic activities which can leverage private green investment, and in doing so, tackle greenwashing.

Based on numerous evidence sessions and a vibrant roundtable discussion, the APPG has built a robust consensus in favour of a science-based UK Green Taxonomy. See our findings and recommendations in the APPG’s Green Taxonomy report, published today.

https://www.appgesg.org/reports/

The APPG consulted members of UK and EU working groups, together with financial services and industry leaders ahead of the UK launching its own Taxonomy, which will be based largely on the EU’s. However, there’s significant scope for avoiding perceived errors made by Brussels – e.g. the UK should reject the inclusion of transitional fossil fuels (natural gas) –  while making it more suitable and usable for the UK economy while setting a higher standard, a platform for international leadership.

The UK Government should also communicate the Taxonomy’s purpose, as a classification tool to define sustainable economic activities and leverage private green investment, and in doing so, tackle greenwashing. These two sides of the same coin are major concerns of the APPG, underlining the motivations of the report. The UK Government needs to “get this right”.

In the APPG’s view, three priorities need to guide the process, and deliver a first-class Taxonomy:

-Credibility, established through close consultations with diverse stakeholders, and crucially, for scientific evidence to act as the Taxonomy’s backbone.

-Usability – the GT is a complex, vast instrument, and needs to be as easy to use and understand for businesses as possible, particularly SMEs.

-Interoperability – markets are global, and the UK’s Taxonomy will be one of many. Britain can leverage its leadership positions in finance; science, engineering and innovation; public policy and market building to greatly assist international interoperability.

That leadership position is in danger of being squandered if we do not see market signals from the UK Government soon. It is a year since HMG launched the landmark Greening Finance Roadmap that set out plans for the Taxonomy – along with SDR – little has happened since.

The APPG urges the government to set a ‘gold standard’ Taxonomy that will put the UK in a position to drive global convergence and leverage more green investment worldwide.