My noble friend the Treasury Lords Minister (Baroness Penn) has today made the following Written Ministerial Statement.
The development of a UK Green Taxonomy is a complex, technical exercise which is linked to multiple sectors of the economy and various legislative and regulatory frameworks. This complexity is also becoming apparent in the European Union (EU), where challenges have arisen during the implementation of the EU’s taxonomy.
The Government is clear that the value of a taxonomy rests on its credibility as a practical and useful tool for investors, companies, consumers and regulators in supporting access to sustainable finance. These are long term matters and it is important to proceed carefully. Having received advice from the Green Technical Advisory Group, and following stakeholder engagement, the Government believes that there is benefit in reviewing its approach to taxonomy development to maximise the effectiveness of our sustainable finance agenda.
Therefore, the Government will not make secondary legislation under the Taxonomy Regulations this year. The Financial Services and Markets Bill is currently before Parliament. Subject to parliamentary approval, the Bill will repeal retained EU law relating to financial services – including the Taxonomy regulations. Using the powers in the Bill, HM Treasury intends to first commence the repeal of the statutory requirement to make technical screening criteria regulations by 1 January 2023, so that the obligation no longer applies. Then it will consider how to use the powers in the Bill to restate and modify retained EU law, and decide whether to change the UK’s approach. This is consistent with the Government’s general approach to retained EU law for financial services.
The Government will provide a further update as part of its publication of the Green Finance Strategy in early 2023.
This statement has also been made in the House of Lords