Chancellor Rishi Sunak at the G7 Finance Ministers\\\' Meeting at Lancaster House in London. Image: Flickr
G7 nations will follow the UK’s lead by making it mandatory for firms to report the climate impact of their investment decisions and concrete steps to crack down on environmental criminals.
Chairing the G7 Finance Ministers meeting in London (5 June), Rishi Sunak rallied his counterparts to work together to ensure markets play their part in the transition to net zero.
Finance Ministers accelerated action on environmental issues, following in the UK’s footsteps by committing for the first time to properly embed climate change and biodiversity loss considerations into economic and financial decision-making.
Six years since the Task Force on Climate-Related Financial Disclosures (TCFD) was created, the UK was instrumental in getting G7 countries to move towards making climate disclosures mandatory across their respective economies. It comes just over six months after the UK led the way by being the first country in the world to commit to do so in November 2020.
This is a major step towards ensuring the global financial system plays its part transition to net zero, as investors better understand how firms are managing climate risks and can allocate finance accordingly.
A coordinated G7 approach is crucial to avoid inconsistent information across markets and extra red tape, so the Finance Ministers also backed work by the International Financial Reporting Standards Foundation to develop a baseline global standard for high-quality, granular sustainability reporting, built from the TCFD framework and work of sustainability standard-setters.
The Finance Ministers also welcomed the imminent launch of a taskforce on nature-related financial disclosures – to mirror the TCFD – and agreed to crack down on the proceeds of environmental crimes by introducing and strengthening central company beneficial ownership registries.