The Treasury is to form a new independent body called The Green Technical Advisory Group (GTAG). The group will oversee the Government's delivery of a “Green Taxonomy” a framework which aims to provide clear standard that would establish when investments or financial products can be defined as environmentally sustainable.
As an independent body, GTAG will provide ministers, officials and businesses guidance on how to address concerns over alleged greenwashing (not really green/faked) within the financial industry.
In recent years green financial products and environmental, social and governance (ESG) focused funds have experienced an increase in demand and their growing popularity has been accompanied by concerns that some products struggle to deliver the environmental benefits as promised.
The Government aims to prevent greenwashing and make it easier for investors and consumers to understand how a firm or product is impacting on the environment and is similar to the EU’s effort.
Although debates on policing the new guidelines and arguments to which assets should be classified as ‘Green’, the experts at GTAG will work independently and provide advice to the government on developing and implementing a green taxonomy in the UK.
Ingrid Holmes of the Green Finance Institute will chair the new group, together with a host of 18 leading financial and business stakeholders including taxonomy and data experts.
Jon Glen economic secretary to the Treasury has welcomed the group and said the Government wanted the new group formation to be investors and businesses and play a part in greening our economy and transitioning to net zero, also to have a clear common definition of the meaning Green.
Also announced today the Government will appoint an Energy Working Group as part of GTAG to provide advice on key technologies, such as hydrogen, carbon capture, utilisation, and storage and how to address nuclear power in the taxonomy. Nuclear being the key element of the UK’s net zero plans.
Demand is now outstripping supply of ethical investment opportunities as more people look to invest responsibly. The tide will turn and more stocks will become greener as more and more stock market listed companies move towards lowering their environmetal impact. This, in turn will reduce the frequency of greenwashing.