On 29 November 2023, the House of Commons Environmental Audit Committee published its report on the financial sector and the UK’s net zero transition.
The report follows an inquiry, launched by the Committee in May 2022 to examine the role of financial institutions in meeting the UK Government’s climate and environment targets.
In this report, the Committee considers the balance between investing in fossil fuels and renewable energy sources in order to meet the UK’s net zero targets. It also examines securing private investment in net zero and the part that carbon pricing can play as part of a changing global market.
In addition, this report considers the UK Government’s position as a global leader in green finance and the effect its policies have on the net zero transition and the implications for local authorities.
The Committee argues that the Government’s position to shift the onus of responsibility to the private sector, and rely on market mechanisms, does not go far enough. It flags concerns that relying on investor behaviour “will not move the dial fast enough” in terms of tackling the nature and climate crises, and sets out recommendations to address its concerns.