Back in February, we explored the possibility of the UK nixing its Green Taxonomy after closing a public consultation on the regulation. Now, following a review of public comments, the UK government confirmed that indeed it will not pursue a green taxonomy. 45% of comments reflected positively on the Green Taxonomy, while 55% were mixed or negative. Given this feedback and the UK government’s other policy priorities, the Green Taxonomy has been officially abandoned. Responsible Investor reports:
“Concerns over the taxonomy were ‘largely centred’ around the experience of applying existing taxonomy frameworks, and doubts on whether these were ‘delivering on desired objectives’. The government said that its work on adapting the International Sustainability Standards Board (ISSB) reporting standards, sustainability assurance and delivering on a commitment to implement 1.5C-aligned transition planning requirements ‘demonstrate that we are working in partnership with industry to deliver on our plans to make the UK a global hub for green and transition finance activity’. The UK announced market consultations on all three topics last month.”
Green Taxonomies have been difficult to develop for regulators globally. The EU is currently in the process of reworking its Taxonomy, including adding a materiality threshold for Taxonomy alignment. Rather than throwing their hat into the ring and trying to sort out a functional taxonomy framework, it appears that the UK is focusing its attention on implementing proven sustainability efforts like ISSB-based disclosures.
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