The UK government should consider setting up a regulatory or advisory body to monitor companies’ compliance with the green taxonomy, according to recommendations in the Green Technical Advisory Group (GTAG) outcome document.
The final document, published in the final prior to the release of the taxonomy, urges the government to consider governance arrangements and statutes for decision-making powers to support the implementation and development of the taxonomy.
Originally planned for implementation by the end of 2022, an update on the consultation for the taxonomy is now expected in autumn 2023, with GTAG saying that a further 21 taxonomies have been announced or are coming into force globally in the time since they were established to advise about Britain’s plans in 2021. There are now 47 in play around the world.
Recognizing the ever-changing landscape, GTAG said the ‘considered approach’ the government has taken to deliver a green taxonomy in Britain will bring benefits as it learns from the efforts of those implementing taxonomies in other regions .
But Ingrid Holmes, CEO of GTAG, warned in her closing statement: “The need to deploy capital as efficiently as possible in the race to net zero and nature recovery has never been greater than now – a taxonomy can provide vital clarity and certainty. about where this capital should be invested.”
According to Holmes, GTAG members “remain convinced of the need for a useful and scientifically robust green taxonomy, aligned with the UK’s net-zero investment and wider environmental needs, within the increasingly crowded disclosure landscape”.
“If properly designed, it could become an invaluable transparency tool, helping to ensure the integrity of disclosures and enabling reporting on objective measures of environmental sustainability.”
In the document, GTAG advocates sustainable governance arrangements for the UK green taxonomy and sets out the options to achieve this. The conclusion is that the government’s least regrettable option would be to establish an advisory body to support implementation in the short term.
This can be achieved by providing additional funding and responsibilities to an existing body, such as the Financial Reporting Council, or by creating a new entity. Voluntary and mandatory approaches to disclosure could both be supported in this way, alongside mandatory disclosure through both routes to eventual implementation.
GTAG further recommends that at the same time, in preparation for the medium term, the government should initiate the process of legislating for long-term legal decision-making powers. Here too, this can be done by granting powers and financial support to an existing body or by setting up a new organization.
“GTAG members now await consultations with the government with great anticipation,” Holmes concluded.
UKSIF CEO James Alexander responded to the final article: “Through it recommendations papers Over the past two years, the Green Technical Advisory Group (GTAG) has highlighted to the government how a ‘green taxonomy’ in Britain could better enable investors and businesses to make the investments in the sustainable economy that are needed if Britain wants to achieve that. reach net zero. We welcome today’s final recommendations, published by the GTAG, which advise the Government to consider an ‘institutional home’ to oversee and support the long-term implementation of the taxonomy.
“It is now crucial that the Government brings forward its green taxonomy consultation without delay, with clear timelines for how and when it will be implemented.”