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In the beginning of 2023, the UK government published a suite of documents including the 2023 Green Finance Strategy and the Net Zero Growth plan. These reiterated existing commitments on Sustainability Disclosure Requirements and development of the UK Green Taxonomy, as well as new commitments to clarify fiduciary duty and transition plan requirements. The UK policy team works on these issues, alongside stewardship, real economy, climate issues, and building on the findings of A Legal Framework for Impact report, to guide policy recommendations to better integrate sustainability impacts into UK financial legislation.
See below for the PRI’s resources on UK sustainable finance policy work.
The PRI welcomes the proposed changes to the UK Corporate Governance Code. The PRI is particularly supportive of revisions seeking to prompt more outcomes-based reporting, increased transparency on director appointments and the inclusion of narrative (sustainability) reporting within the remit of audit committees. We encourage the FRC to introduce provisions on the disclosure of sustainability related skills and experience of board members and governance arrangements for the oversight of sustainability matters.
The PRI welcomes the Department of Works and Pension (DWP) and HM Treasury (HMT) call for evidence as an opportunity to ensure pension trustees have the right knowledge, skills and support to make investment decisions in the long-term interest of beneficiaries. We make recommendations on the need for ESG related training for trustees, clarification of fiduciary duty, and increased engagement with and incorporation of beneficiaries' preferences.
The PRI welcomes this review as an opportunity for the DBT and FRC to increase the consistency, reliability, and comparability of non-financial corporate reporting.
The PRI endorse the ISSB Standards and recommend that the UK Government transpose IFRS S1 and IFRS S2 into UK regulatory requirements, as well as establishing an endorsement mechanism for current and future ISSB Standards to become part of UK law.
The PRI supports regulatory progress to remove barriers to investors contributing to positive sustainability outcomes, as well as the FCA's work in enabling an economy-wide transition to net zero. Our recommendations call for greater clarity on the legal responsibility to address sustainability outcomes, updated guidance on skills and knowledge on climate and sustainability risks, and decision-useful reporting.
Creating a net zero financial centre in the UK requires foundational changes in public policy, and the PRI offers recommendations rooted in ensuring that financial flows are consistent with zero carbon, climate resilient development pathways that work for people and the planet.
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It is crucial that assessing and accounting for sustainability impact becomes a core part of investment activity. That’s why PRI, UNEP FI and The Generation Foundation are leading our work programme “A Legal Framework for Impact.”