Speaking at the COP26 climate conference in Glasgow, chancellor Rishi Sunak says the UK Government will force financial institutions and UK-listed companies to publish plans on how they will decarbonise and transition to net zero.
Outlining the plans, Sunak told the coference that the UK aims to become be the world’s first Net Zero-aligned Financial Centre.
Initially, this will require asset managers, regulated asset owners and listed companies to publish transition plans that consider the government’s net zero commitment or provide an explanation if they have not done so.
While not disallowing investment in high carbon industries, the Government says the aim is to increase transparency and accountability about the actions firms are planning to take.
"It will be for the market to determine if these plans are adequate or credible," states the Government in a fact sheet. "Investors, through their stewardship, may use their influence and their votes to encourage more ambition or accelerated progress.
As standards for transition plans emerge, the Government and regulators will take steps to incorporate these into the UK’s Sustainability Disclosure Requirements and strengthen requirements to encourage consistency in published plans and increased adoption by 2023.
Sunak says the Government intends to legislate to deliver on this promise and will set up a high-level 'Transition Plan Taskforce' to co-ordinate the effort and report back by the end of 2022.