In his speech, Glen said the UK government intends to build on the TCFD requirements with “new economy wide sustainably disclosure requirements (SDRs)”. He said this will require businesses to report “on how they impact and are impacted by climate and the environment”. The UK rules, he said, would “incorporate the global baseline standards for sustainability reporting being developed by the International Sustainability Standards Board”. The ISSB consulted on standards for sustainability reporting last year and recently confirmed that the first two standards (S1 and S2) are expected to be issued at the end of June 2023 and will become effective starting January 2024.
Glen also provided an insight into how the UK government intends to update its existing green finance strategy, which was first published in 2019. The government held a call for evidence in relation to updating the strategy last year.
The refreshed strategy, Glen said, “will have a new policy framework for nature markets”. He said that framework “will provide clearer principles and policy guardrails for the development of new nature markets, including new arrangements to accelerate the adoption of robust standards for investing in a broader range of ecosystem services”.
Glen said: “We cannot expect farmers and conservation experts to commit to projects, or investors to mobilise resources at significant scale, without a robust, stable and reliable market framework. Nor can we expect the public and environmental experts to trust these markets where there are concerns about lack of transparency and the potential for greenwashing.”
The new green finance strategy will also set out how the UK government intends to “to strengthen and scale up voluntary carbon markets worldwide”, according to Glen.
Environmental law expert Fiona Ross of Pinsent Masons said: “We have already been seeing significant interest in natural capital markets, including the development of carbon sinks and habitat banks in the UK to generate carbon offsets, biodiversity net gain and nutrient neutrality credits. The announcement of an updated finance strategy and policy framework for such markets, and in particular a broader range of ecosystems services, is a welcome signal that the government wants to further encourage and incentivise the development of these markets, and sees them as crucial in scaling up investment in nature based solutions.”
“The voluntary carbon market has not been without its difficulties, and it will be interesting to see what the updated green finance strategy includes in terms of strengthening and scaling up the market worldwide. The Taskforce on Scaling Voluntary Carbon Markets (TSVCM) has been working on core carbon principles for voluntary carbon offsets for publication later this year, and we would expect the updated green finance strategy to take account of this and other work by the TSVCM,” she said.