It Is Imperative For The United Kingdom To Assume A Paramount Position In The Realm Of Green Finance Globally
Rt Hon. The Lord Randall of Uxbridge posits that the implementation of the new finance bill has the potential to enhance the United Kingdom's appeal for green finance, while simultaneously promoting conservation efforts for forests.
When I proposed a comprehensive examination of the impact of human activity on nature, similar to the Stern Report, the subsequent Dasgupta Review discovered that our demands on natural resources far exceeded their capacity to sustain them. This has led to immense pressure on biodiversity and has placed society at an extreme level of risk. The per capita natural capital stock decreased by nearly 40% between 1992 and 2014, during which time per capita produced capital doubled.
Therefore, I was greatly pleased when the Montreal Conference on Biodiversity (COP15) established a worldwide objective for nature conservation - to safeguard 30% of land and sea by 2030. This protection is crucial and pressing, as evidenced by the WWF's Living Planet Report, which found that wildlife populations have decreased by 69% since 1970.
One of the contentious issues that was addressed during COP15 was the topic of finance. After several delegations withdrew from the conference, an agreement was reached on a target of $200 billion for conservation initiatives from both public and private sources.
I am proud to announce that our government fully endorses this financial commitment and is dedicated to fulfilling its role in achieving this goal. However, to accomplish this, it is essential to align mainstream finance with these objectives - which brings me to the Financial Services and Markets Bill that is currently under consideration by Parliament.
The Bill outlines the regulatory framework for the financial sector in the upcoming decades. It is imperative that the bill aligns with our international obligations to nature and climate conservation.
There is intense competition among the world's leading financial centers to attract green investments. Environmental, Social, and Governance (ESG) investing is the fastest-growing segment of the finance sector, and the sustainable finance market has reached $1.6 trillion globally in 2021.
For the United Kingdom to establish itself as the global center for green finance, it is crucial to demonstrate that we possess a well-regulated market that can safeguard investors from false environmental claims and aid companies in transitioning to a more sustainable model.
The Financial Services and Markets Bill sets the framework for determining whether the UK's financial regulators will have the necessary authority to address issues such as false environmental claims. As it stands, the Bill may compromise the UK's reputation as a supportive market for green finance.
This is why it is imperative for regulators to establish a statutory objective on climate change and nature conservation. Failing to do so will provide our international competitors with an advantage. Without amendments, the Financial Services and Markets Bill will not ensure that our financial sector is prepared to finance the transition to a net-zero, nature-positive economy.
Mobilizing private finance to address the nature and climate crises presents a significant opportunity for UK businesses. The private sector recognizes this, which is why several financial institutions have already written to the Bill Committee expressing their support for amending the current Bill to make the UK the world's leading center for green finance in the upcoming decades.
The finance sector makes a significant contribution to the economy, generating more than £193 billion (including £75 billion in tax) and employs 2.3 million people across the UK. It is crucial that we approach the regulation of this sector with the utmost care and consideration.
Ensuring the Financial Services and Markets Bill is properly formulated will be essential for the government to realize its goal of making the United Kingdom the world's first financial center aligned with net-zero emissions, and to safeguard and restore nature. It will aid in obtaining the necessary finance to protect forests, invest in renewable energy, improve energy efficiency in homes, and promote climate and nature-positive growth across the UK and its economy.
This bill is a crucial element in shaping the regulatory framework for the financial sector for the next several decades. However, it currently fails to address the pressing issues of nature loss and climate change and does not sufficiently deliver on the government's commitments to nature conservation and net-zero emissions.
For this reason, I will be supporting the inclusion of a new objective for the UK's financial regulators on climate and nature conservation.
Post a Comment for "It Is Imperative For The United Kingdom To Assume A Paramount Position In The Realm Of Green Finance Globally"