LONDON (Reuters) – Britain has set up a group of experts to help it classify climate-friendly assets and stop “greenwashing” of investments that don’t live up to their sustainable credentials.
Britain is keen to see more money flowing into investments that are green or sustainable to help it meet net-zero environmental goals.
Self-labelled green investments, however, have raised concerns among regulators that investors don’t have independent information to guide them.
The finance ministry said the Green Technical Advisory Group (GTAG) will oversee the delivery of a “taxonomy” or common framework that sets the bar for investments that can be defined as environmentally sustainable.
The group, made of representatives from academia, business and finance will provide non-binding advice to the government on developing and implementing a green taxonomy in Britain.
A taxonomy will help clamp down on greenwashing and make it easier for investors and consumers to understand how a firm is impacting the environment, the ministry said.
“A UK green taxonomy will provide better data on the environmental impact of firms, supporting investors, businesses and consumers to make green financial decisions and accelerating the transition to net zero,” Britain’s financial services minister John Glen said in a statement.
The European Union moved early by publishing the first part of its own taxonomy in April, listing economic activities and the detailed climate-related criteria they must meet to be labelled as a green investment.
But after months of fierce lobbying from governments and industry, Brussels said it would take more time over how to classify politically sensitive areas like natural gas and nuclear power.
Britain’s finance ministry said the government will set up a separate energy working group as part of GTAG to provide advice on hydrogen, carbon capture, utilisation and storage, and how to address nuclear power in the taxonomy.
GTAG, which will be chaired by Ingrid Holmes from the Green Finance Institute, will meet for the first time this month and run for at least two years, providing its initial recommendations to the government in September.
Reporting by Huw Jones; Editing by Alexandra Hudson