Sustainable investing expert group Green Technical Advisory Group called on the U.K. government to set clear green-finance standards to help bring investments to the domestic market and compete internationally.
Fragmented international regulatory frameworks are making it more challenging and costly for investors, GTAG, an independent group chaired by the Green Finance Institute that was established by the U.K. government in June 2021, concluded in its analysis published Thursday.
GTAG wants the U.K. government to align its sustainable finance definitions and classifications of investments with other international standards to foster cross-border investments and to give clarity to investors on what counts as sustainable investment.
"Such an approach would help to channel international capital towards net-zero in the U.K. and elsewhere," the group added.
The group also said the government should work with international sustainable finance groups including the G20 Sustainable Finance Working Group, Network for Greening the Financial System, International Sustainability Standards Board and International Platform on Sustainable Finance on common science-based definitions.
"Building on its strong track record in world-leading green finance policy, the U.K. is well placed to help address the challenge of global market fragmentation, while at the same time securing its leadership on green finance through a scientifically robust and usable taxonomy," Ingrid Holmes, chairwoman of GTAG and executive director at Green Finance Institute said in a news release Thursday.
Ms. Holmes added that the U.K. must act now given the globally focused financial sector, which has some of the deepest pools of international capital.