London — British finance minister Rishi Sunak told companies on Wednesday to set out plans by 2023 for a transition to a low-carbon economy, as part of steps to make Britain the world’s first net zero financial centre.
However, there will be no mandatory commitments to net zero for firms or a ban on investments in carbon-intensive activities, the ministry said. Instead, investors will have to determine if companies’ plans are adequate or credible. Shaun Carazzo, a sustainable banking finance partner at consultants EY, said financial firms must now rapidly undergo a structured process to understand their current financed emissions, and develop appropriate ongoing targets and decarbonisation strategy to report on.
In a speech to the UN COP26 climate conference in Glasgow, Sunak also welcomed the announcement from the Glasgow Financial Alliance for Net Zero that more than $130-trillion of private capital, equivalent to 40% of the world’s financial assets, will now be aligned to climate goals of limiting global warming to 1.5°C, the ministry said.The alliance is a grouping of more than 160 financial firms chaired by former Bank of England governor Mark Carney.