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Times
15-07-2025
- Business
- Times
Government ditches plan to stop businesses ‘greenwashing'
The government has dropped a plan to introduce a framework for standardising the calculation of carbon emissions as a way of cracking down on companies and investment funds making exaggerated environmental claims. The plan for a so-called green taxonomy, a classification tool that would have required companies to be more accurate and rigorous in their environmental claims, has been ditched, the Treasury said. 'After careful consideration of the responses [to a recent consultation], the government has concluded that a UK taxonomy would not be the most effective tool to deliver the green transition and should not be part of our sustainable finance framework,' it said. • How to avoid greenwashing in your carbon-neutral claims Other policies, it said, were 'of higher priority to accelerate investment into the transition to net zero and limit greenwashing'. The planned policy was seen by environmentalists as an important tool for stamping out so-called greenwashing as well as helping direct new capital into areas most likely to help reduce climate change. The UK Sustainable Investment and Finance Association, which has 300 members with £19 trillion of assets under management, described the move as 'disappointing'. While 45 per cent of 150 responses to a Treasury consultation on the proposed taxonomy were positive, 55 per cent were 'mixed' or negative, it said. Concerns centred around 'the real-world application of this policy, primarily driven out of experience of working with other taxonomies'. Some respondents said other policies would have more impact. Separate rules from the Financial Conduct Authority on the labelling and naming of funds came into force earlier this year, while rules from the Competition and Markets Authority and Advertising Standards Authority have also been used to challenge greenwashing. Some large companies in Britain already use an EU-devised taxonomy to calculate their emissions and impact on climate change. Companies and fund managers have been able to make all kinds of 'sustainability' and green claims without an independently set framework through which to judge them. 'There was limited evidence of a compelling use case for a specific UK taxonomy that would achieve outcomes which could not be otherwise achieved using existing taxonomies or market frameworks, or other policy,' the Treasury concluded.


Telegraph
06-03-2025
- Business
- Telegraph
Net zero to cost British workers equivalent of £2,600 each
Net zero will cost the average British worker the equivalent of almost £2,600 as fossil fuel assets worth billions of pounds become worthless. So-called 'stranded assets' will cost the UK economy £110bn by 2040, analysis by the UK Sustainable Investment and Finance Association (UKSIF) shows. The group said this was equal to £2,595 for every working adult in Britain. The figures reflect the cost of investments in industries like oil and gas that are set to become worthless as the world transitions away from fossil fuels. This includes untapped reserves and physical infrastructure such as gas pipes in the ground and oil rigs in the North Sea, which much be decommissioned safely at a cost of billions. Some £15.2bn of pension assets could also become worthless by 2040, UKSIF warned, equal to 0.5pc of the total UK pension pot. Willemijn Verdegaal, one of the report's authors from Transition Risk Exeter, said: 'Stranded assets have the potential to cause significant disruption to the global financial system, and the UK faces particularly severe exposure.' Only the US, Russia and China face a bigger blow from these costs, the report warned. Once accounting for population size only Norway is poised to take a greater hit amongst OECD countries. Full steam ahead It comes amid growing concern about the cost and speed at which Britain is racing towards net zero carbon emissions. Analysis by Peel Hunt published this week suggested that decarbonisation efforts since 2005 had left families poorer. Rachel Reeves, the Chancellor, has sought to refocus the government around pro-growth policies, even where they clash with net zero. While Ms Reeves has insisted there is 'no trade-off between economic growth and net zero', she has said carbon emissions have too often been used as an excuse 'not to invest'. Ed Miliband, the Energy Secretary, continues to wholeheartedly push net zero. He has moved to deliver Labour's manifesto pledge to ban new oil and gas licences in the North Sea, despite warnings about lost jobs and investments. The UKSIF report warned that individual savers across Britain would bear the brunt of the cost of net zero through their pensions, their savings losing value and the wider impact on the economy. The world faces a total economic cost of $2.28 trillion (£1.8 trillion) from abandoning fossil fuels, a figure which has nearly doubled in the last five years. However, the cost of failing to stem climate change would be far greater, the report warned. If global temperatures rise between 2.5 and 2.9 degrees Celsius, it will spark natural disasters inflicting losses as high as $12.5 trillion (£9.7 trillion) by 2050. Scientists have warned that events like the California wildfires in January and the Valencia floods last October would become far more frequent and intense in such a scenario. Vast amounts of fossil fuels must be left in the ground to prevent global temperatures from surging beyond 1.5 degrees above pre-industrial levels, the report said. Recent events suggest this may be difficult to achieve. Oil majors BP and Shell had vowed to focus more on green energy but have recently pivoted back to focusing on oil and gas. James Alexander, the chief executive of UKSIF, said: 'Too many oil and gas companies are betting on demand that will not materialise in a decarbonising world, and the public are at risk of paying the bill.'