The UK Sustainable Finance Framework is intended to deliver green growth and make the UK a leading centre for Green Finance. Elected in 2024, the Labour Government has built on the previous Conservative Government’s 2023 Green Finance Strategy, unveiling key initiatives at Mansion House in November 2024. With the Sustainability Disclosure Requirements (SDR) and investment labels regime now in effect, focus has now shifted to other priority areas, including finalising UK Sustainability Reporting Standards (UK SRS), transition plans, regulation of ESG ratings providers, determining how best to take forward the recommendations of the Transition Finance Market Review (TFMR) and considering the development of a UK Taxonomy.
AFME’s Work
AFME is actively engaging with relevant stakeholders to ensure that the UK Sustainable Finance Framework supports the development of sustainable finance in the UK and enables the role of banks in financing the transition. We contribute to discussions on key issues, including the development of UK SRS, transition plans, the regulation of ESG ratings providers and the potential development of a UK Taxonomy. AFME is also promoting policies to scale transition finance and is an observer of the Transition Finance Council’s working group on credibility and integrity.
AFME supports the UK Government’s plans to deliver green growth and make the UK a leading centre for Green Finance. Financial institutions have an important role to play in providing and facilitating the financing needed to support companies as they decarbonise. It is also important to recognise that the financial sector’s ability to support the transition will depend to a large extent on whether the conditions are in place to enable the real economy to transition, thereby creating opportunities for finance and investment to support such activities.
To make progress in meeting the UK’s Net Zero and broader sustainability goals, it is crucial that the UK focuses on putting in place the policies, roadmaps, incentives, mandates and investments for the real economy to have the information, tools and incentives to adapt their businesses. This will in turn facilitate finance which will be available to support companies’ investment and financing needs throughout the transition.
Alongside this, it is important to proceed with targeted and proportionate policies on sustainability reporting and transition plans. The UK’s ambition to become a leading hub for the provision of transition finance should also be upheld.
