Big firms and financial institutions in the UK will now have to produce reports regarding their exposure to climate risks within five years under the terms of a tougher regime announced by Chancellor Rishi Sunak.
Disclosure by large businesses will be made mandatory in an attempt to tackle global warming. The chancellor disclosed plans for Britain’s first green gilt. This bond will be floated in the financial markets during 2021 with the investment of carbon-reducing projects.
In a Commons statement, Sunak said, “This new chapter means putting the full weight of private sector innovation, expertise and capital behind the critical global effort to tackle climate change and protect the environment.”
The Treasury states that the newly introduced rules and regulations will cover a significant part of the economy. This includes listed commercial companies, United Kingdom – registered large private companies, banks, building societies, insurance companies, pension schemes regulated by the Financial Conduct Authority and occupational pension schemes.
The UK government wants to make a net-zero-carbon country by 2050. Climate change was “a crisis that involves the whole world and from which no one will be able to self-isolate”, Mark Carney said on Monday.
Sunak, Carney and Bailey are all speakers at the Green Horizon summit, which took place in London on what would have been the first day of the UN climate change conference in Glasgow. Covid-19 forced the postponement of the event.
Bailey said: “Our goal is to build a UK financial system resilient to the risks from climate change and supportive of the transition to a net-zero economy. In the aftermath of the financial crisis we took far-reaching action to make the financial system more resilient against crises – Covid is the first real test of those changes.”