Explainer: Where does the UK stand with its taxonomy?

The British government is biding its time over legislating for its green taxonomy.

The UK taxonomy, which will aim at defining environmentally sustainable investments through a common framework, was due to enter UK secondary legislation last year. The government is taking its time, however.

In December, the economic secretary to the Treasury, Andrew Gri!ith, told parliament that it would not, as previously planned, legislate for the taxonomy by the end of 2022, citing the complex and technical nature of drawing up the initiative.

There is now no clear deadline for the UK taxonomy. The government is due to publish an updated green finance strategy early this year, which could conceivably include reference to the initiative.

Conservative MP Chris Skidmore’s recent net zero review, meanwhile, included the taxonomy among “the key steps the UK must take” to deliver a consistent approach to achieving its net zero ambitions.

“The UK government needs to ensure the taxonomy is clearly defined upfront to avoid suffering from the ‘drip feed’ and misinterpretations previous taxonomies have suffered from,” Victory Hill Capital Partners head of sustainability Eleanor Fraser Smith tells Sustainable Views.

“There has to be time for implementation prior to enforcement to enable firms to integrate criteria into frameworks,” she adds.


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