The UK government should consider setting up a separate body to monitor if companies are adhering to the green taxonomy, the Green Technical Advisory Group (GTAG) recommended in its final report.
The GTAG, an independent body tasked with recommendations for the UK’s green taxonomy, said this could be done by either providing funding to an existing body or creating a new entity. An advisory body could support voluntary and mandatory approaches and help “advance final implementation of mandatory disclosures”.
In parallel the government should also initiate the process of legislating for long-term statutory decisions, either through an existing body or through a new organisation, GTAG recommended.
The UK government missed its initial deadline of producing a green taxonomy by the end of 2022 but has reaffirmed its commitment to release a taxonomy this year, GTAG said in its report.
Since the UK announced its plan for a green taxonomy, 21 others have been announced or implemented around the world, bringing the total to 47 across the globe, the panel said. While some firms are concerned about the number of global taxonomies, GTAG’s chair Ingrid Holmes said the plethora of taxonomies is an opportunity for the UK to learn from the efforts of those implementing them in other areas.
“An opportunity to understand the teething problems experienced with taxonomy reporting elsewhere, which GTAG has noted principally hinge on the definition of do no significant harm criteria and the approach to key performance indicator reporting, and responding with an iteration of these elements that others can also adopt,” she said in a final statement.
However, she said it was vital that capital is employed as efficiently as possible “in the race to net zero and nature recovery”. GTAG had previously recommended that the UK develop a “gold standard” taxonomy to attract green finance.
“GTAG’s membership remain convinced of the steadfast need for a usable and scientifically robust green taxonomy, aligned to the UK’s net-zero investment and wider environmental needs, within the increasingly busy disclosures landscape. Designed well, it will be an invaluable transparency tool, helping to ensure the integrity of disclosures and enabling reporting on objective measures of environmental sustainability,” Holmes said.
This page was last updated October 24, 2023
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