Despite different views, the UK green taxonomy should diverge from the European Union’s (EU’s) as little as possible, according to part one of the Green Technical Advisory Group (GTAG) recommendations.
GTAG acknowledged that there would be some differences due UK local law, its report said, “In general, a strategy that is consistent with the EU taxonomy is likely to have fewer costs and more benefits than one which is more ambitious in some criteria and less in others,”
The GTAG was established in 2021 to provide independent advice to the UK government on implementing a green taxonomy.
It is chaired by Green Finance Institute executive director Ingrid Holmes and includes members from across academia, the investment world and real economy. It works alongside a panel of taxonomy and data experts.
The UK has implemented the majority of the EU taxonomy regulation, which sets out the high-level design features of the taxonomy in the UK.
However, the delegated acts have not been on shored. These include the technical screening criteria (TSC) – the detailed criteria for significant contribution as well as those for do no significant harm (DNSH) for climate change mitigation and climate change adaptation – have not been on-shored as they were introduced after Brexit.
The group said that the UK should strive to be as ambitious as the EU taxonomy and has called for a science based approach with any deviations in TSC evidenced and published.
As Holmes wrote in the report introduction, “A robust and science-based green taxonomy for the UK will also ensure that the UK’s globally focused financial sector, which has some of the deepest pools of internationally oriented capital, is well placed to take advantage of growth in the global green finance market, which has increased from $5.2 billion in 2012 to more than $540 billion in 2021.
GTAG also recommended a two-pronged approach for implementation that supports investment into adaptation-aligned economic activities.
The first is to develop an “investment-enabling adaptation framework and policies”, which would include an overarching goal for climate change adaptation and a call to action for businesses and finance.
The second is an adaptation working group to advise on the design and implementation of an enhanced set of adaptation TSC to help catalyse the investment needed to achieve resilience and deliver wider economic opportunities relating to adaptation.