In line with the mood music of ESG initiatives, fintech and fintech policy continues to look towards green and sustainable finance.
The UK Government's Green Finance Strategy, published July 2019, recognises the role of the financial sector in delivering global and domestic climate and environmental objectives, and sets the approach to greening the financial systems. On 11 May 2022 the UK Government launched a call for evidence to support the development of an update to the Green Finance Strategy (the "Consultation"). The Consultation closes at 11:45pm on 22 June 2022, and you can find the Consultation here along with its thirty-nine questions on four key objectives:
- capturing the opportunity of green finance
- mobilising finance for the UK's energy security, climate and environmental objectives
- greening the financial system
- leading internationally
Industry stakeholders are encouraged to contribute their thoughts and help update the Green Finance Strategy. The update, planned for publication in late 2022, will aim to highlight the progress to date and set out further steps on how to better ensure the financial services industry is supporting the UK's sustainability and environmental objectives. It is pivotal that fintechs take part in the Consultation to ensure their voices are heard and to help shape the future of sustainable finance in the UK and internationally.
The FCA will be actively involved in the development of the UK sustainability disclosure requirements as proposed by the Green Finance Strategy, which will impact fintechs and other financial service providers who are listed issuers, asset managers and asset owners. These organisations will be required to report on their sustainability risks, opportunities and impacts. For more information please click here.
In addition to the Green Finance Strategy, we have seen the FCA take positive action towards a greener financial system, by introducing its Green Fintech Challenge 2021. The Green Fintech Challenge 2021 aims help fintechs overcome some of the challenges that moving to a net zero economy will rise in the area of sustainability and climate change. We have previously commented on the Green Fintech Challenge, and you can read our blog post on this here. We await to hear of such challenge for 2022.
HM Treasury launched the UK's Transition Plan Taskforce (the "TPT") in April 2021. The TPT has been established as part of the Green Finance Strategy. The TPT have a two year mandate to develop a gold standard for climate transition plans, to ensure financial organisations prepare rigorous plans to achieve net zero and support efforts to tackle greenwashing. You can find out more information about TPT here.
In addition to the Green Finance Strategy update, the UK Government are keen to:
- develop policy and further work on the ESG data ecosystem
- create a UK taxonomy to avoid the risk of 'greenwashing'
- develop the sustainability disclosure requirements