Question to the Department for Business, Energy and Industrial Strategy:

To ask Her Majesty's Government what assessment they have made of the carbon emissions produced by the UK financial sector.

The UK follows the agreed international approach for estimating and reporting greenhouse gas emissions under the UN Framework Convention on Climate Change (UNFCCC), which is for countries to report emissions produced within their territories. All UK domestic and international greenhouse gas emissions reductions targets, including our Net Zero commitment, are based on these territorial emissions.

The UK was the first major economy to commit to Net Zero by 2050, and to achieve that ambition, we want to ensure that every financial decision takes climate change into account. This will require a drastic increase in the quantity, quality and comparability of climate-related disclosures.

That is why, in November 2020, my Rt. Hon. Friend Mr Chancellor of the Exchequer announced the UK’s intention to make disclosures in line with the recommendations of the Task Force for Climate-related Financial Disclosures mandatory in the UK across the economy, including the financial services sector, by 2025. This commitment is world-leading and significant progress towards achieving our ambition, including new requirements for premium-listed firms to disclose their greenhouse gas emissions, has already been made.

We have also committed to implementing a green taxonomy that will establish a common definition for ’sustainable economic activities’ and improve understanding around the impact of firms’ activities and investments on the environment. Together, these measures will ensure that firms across the whole economy are disclosing robust and comparable climate and sustainability-related information that is decision-useful for investors. This will help close the sustainability data gap, as well as preventing greenwashing and supporting the greening of the UK economy.