COP26: UK financial industry publishes framework to ‘green the economy’

UK Finance, which represents nearly 300 British financial services firms, has released a new report which explores the current state of sustainable banking in the UK and outlines the steps being taken to put in place a comprehensive regulatory framework to underpin ‘the greening of the economy.’

The financial trade union said that its new report opens with its policy statement, which sets out the industry’s support of the industry led and UN-convened Net-Zero Banking Alliance (NZBA) and the Glasgow Financial Alliance for Net Zero (GFANZ), all banking and finance firms embedding climate responsibility into their governance and strategy in support of a “just and orderly transition to a net zero economy,” and setting of clear, globally-used definitions for environmental, social and governance (ESG) reporting.

The move comes as the Bank of England also publishes details of how it will ‘green’ its Corporate Bond Purchase Scheme (CBPS.)

“Our strategy in greening the CBPS is to help incentivise firms to put in place and adhere to credible plans for reducing their emissions,” said Bank of England governor Andrew Bailey. “Incentivising change is more powerful than immediate divestment to encourage the significant shifts in behaviour required across the economy in order to achieve net zero by 2050.
“We hope that being transparent about our approach will encourage and enable other investors to further develop strategies to green their portfolios.”

The UK Finance report also provides an analysis of the early steps being taken in support of net zero banking, as well as a Climate Responsibility Resource Pack, detailing relevant green finance policies, regulations, initiatives, and thought leadership.

“The banking and finance sector fully supports the government’s goal of net zero UK emissions by 2050,” said David Postings, chief executive, UK Finance. “As the world convenes in Glasgow for COP26, our report shows that lenders understand the key role they have to play in the transition to a low-carbon and more sustainable economy.”

The chief exec added that it is “vital” the transition to net zero is fair and inclusive, bringing benefits to everyone across the UK.

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