Government to support banks and large firms in setting out their climate plans

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3 days ago

Energy Secretary Ed Miliband has announced the Government will support banks and large companies in developing their climate transition plans.
Speaking at the Climate and Innovation Forum during London Climate Action Week on Wednesday, Mr Miliband said the Government is 'determined to make the UK the sustainable finance capital of the world'.
Transition planning means businesses develop a road map that outlines how they intend to adapt and transform their operations, strategies and business models to align with their climate goals.
Publishing credible plans is seen as a key part of a firm's ambition to reduce its impact on the planet as well as any climate-related risks, helping to provide confidence and long-term clarity to investors.
Government support for transition planning comes as part of its efforts to stimulate billions of pounds a year in private investment in net zero sectors and its ambitions for the UK to become a clean energy superpower.
The UK is already seen as a world leader in sustainable finance and many top companies have voluntarily developed comprehensive plans.
But many have yet to release what is considered a credible plan or publish one altogether.
Campaigners have long been calling for the Government to make publishing transition plans mandatory for firms as a way to drive meaningful climate action and attract investment.
Mr Miliband said: 'Through our clean energy superpower mission and industrial strategy, we can win this global race and accelerate investment into these sectors – growing the economy, turbocharging the transition to net zero and delivering on our Plan for Change.
'Our plans will transform our leading financial services sector into a global hub for green investment.'
Justin Madders, minister for competition and markets, said: 'We want to work with businesses to develop a 'common sense' sustainable reporting framework that is transparent, clear and proportionate for those investing in the UK.
'These measures will enhance competition in the sustainability assurance sector, helping to deliver on our Plan for Change and kickstart economic growth.'
The Government announced that it will take forward recommendations from last year's Transition Finance Market Review, which explored how ministers could support firms to access the capital needed to decarbonise and deliver on climate goals.
This included advising the Government to launch a consultation on requirements for outlining corporate transition plans.
But the Government also said the design of any future requirements will be aligned with Prime Minister Sir Keir Starmer's commitment to reduce regulatory compliance costs by 25%.
Alok Sharma, chairman of the Transition Finance Council, said: 'A clear message from the Transition Finance Market Review was that high-quality disclosure and information are vital for investors and a pre-condition to a flourishing sustainable and transition finance market.
'The UK can become the pre-eminent global financial centre for raising transition finance, but this is a time-limited opportunity, and that is why it will be vital to move quickly from consultation to implementation.'
The Government said it will publish three consultations.
The first will explore how to take forward its commitment on transition planning, the second will focus on new sustainability reporting standards that can provide clear comparable information on companies to investors and the third will look at how to develop a voluntary registration regime for the providers of assurance of sustainability reporting.
Alistair Phillips-Davies, chief executive at SSE, said: 'As an early adopter of climate transition plans, we've seen first-hand how they can build investor confidence and accelerate progress toward net zero.'
Rachel Solomon Williams, executive director of the Aldersgate Group, said: 'Using the feedback from these consultations to develop clear financial guardrails will help strengthen the transparency, interoperability, and credibility of climate-related financial disclosures.'
Ian Bhullar, director of sustainability policy at UK Finance, said: 'The financial services industry backs proportionate, internationally aligned sustainability reporting.'
The Government cited a recent survey of financial institutions conducted by South Pole, which found that 84% of UK-based financial institutions find companies with transition plans more attractive to invest in.