New independent group to help tackle ‘greenwashing’

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A new expert group whose work is set to support investors, consumers and businesses to make green financial decisions has been announced.

The Green Technical Advisory Group (GTAG) will oversee the Government’s delivery of a “Green Taxonomy” – a common framework setting the bar for investments that can be defined as environmentally sustainable.

Chaired by the Green Finance Institute, GTAG will be made up of financial and business stakeholders, taxonomy and data experts, and subject matter experts drawn from academia, NGOs, the Environment Agency and the Committee on Climate Change.

The Green Taxonomy is set to help clamp down on greenwashing – unsubstantiated or exaggerated claims that an investment is environmentally friendly – and make it easier for investors and consumers to understand how a firm is impacting the environment.

The Green Technical Advisory Group (GTAG) will provide ‘independent, non-binding advice’ to the Government on developing and implementing a green taxonomy in the UK context.

John Glen, Economic Secretary to the Treasury, commented: “We want investors and businesses to play their part in greening our economy and transitioning to net zero, so it’s crucial we have a clear common definition of what green means.

“A UK green taxonomy will provide better data on the environmental impact of firms, supporting investors, businesses and consumers to make green financial decisions and accelerating the transition to net zero.

“I look forward to receiving the advice of the expert Green Technical Advisory Group as we put in place a rigorous taxonomy that works for the UK and sets a high standard globally.”

The Government will also establish an Energy Working Group as part of the GTAG to provide advice on key technologies such as hydrogen, carbon capture, utilisation and storage, and how to address nuclear power in the taxonomy – a key element of the UK’s net zero plans. Other expert groups may also be established where required as work progresses.

The Chancellor first announced the UK would implement a green taxonomy in November 2020, as part of wider plans to position the UK at the forefront of green finance, including issuing the UK’s first ever sovereign green bond later this year.

The launch of GTAG comes shortly after the UK was instrumental in getting G7 countries to move towards making climate disclosures – in line with recommendations from the Task Force on Climate-Related Financial Disclosures (TCFD) – mandatory across their respective economies.

The agreement was secured at a meeting of G7 Finance Ministers chaired by the Chancellor last weekend and comes after the UK was reported to be the first country in the world to commit to make TCFD-aligned climate reporting fully mandatory by 2025.

Ingrid Holmes, Executive Director of Green Finance Institute, added: “The GTAG will play a key role, advising Government on implementing a robust, science-based Taxonomy that is adapted to the specific needs of the UK context, and works for all stakeholders.

“We’re delighted to chair the GTAG, and to welcome all 18 members onboard, all of whom have a demonstrable interest and/or track record of being engaged on the issue of developing and using taxonomies, and the practicality of applying a taxonomy in a UK-specific context.”

More information about GTAG and its members can be found from the UK Government website.