Britain Hits Pause Button on 'Green' Taxonomy Plans
Britain paused its 'taxonomy' for guiding companies and investors on green investments, saying it was important to consider matters carefully before finalising its approach.
The government had indicated it would base the UK taxonomy on the year-old EU counterpart and legislate by the end of 2022.
Taxonomies set out conditions for labelling an activity "sustainable" and help the economy meet net-zero targets.
They are meant to guide companies on complying with mandatory climate-related disclosures to investors that are being rolled out in 2023.
Britain's financial services minister, Andrew Griffith, said on Wednesday that developing a UK taxonomy was a complex exercise linked to multiple sectors of the economy.
In a statement to parliament, Griffith said, "This complexity is also becoming clear in the European Union, where problems have come up during the implementation of the EU's taxonomy."
It was important to proceed carefully, he said.
Griffith said, "Because of this, the government won't make any secondary laws under the Taxonomy Regulations this year."
Instead, it will use powers under its financial services and markets bill being approved in parliament to repeal an obligation on Britain to make taxonomy-related rules by January.
The government would then decide whether to change its approach to taxonomies, with an update in early 2023.
The UK Sustainable Investment and Finance Association said it was "hugely disappointed" with the statement from Griffith after a lack of clarity on the issue throughout this year.
"We want the government to say again that it plans to quickly come up with a science-based taxonomy and a clear timeline for putting it into place... This step would help prevent the UK from falling behind the EU and other jurisdictions," UKSIF CEO James Alexander said.
EU financial services chief Mairead McGuinness said this month that making it easier for companies to apply the bloc's taxonomy was a top priority given concerns over "usability".