UKSIF's Policy Vision

UKSIF’s Policy Vision, launched on 28 April 2021, represents the UK sustainable finance sector’s new vision for strengthening the UK’s global leadership in the growing sustainable finance industry and accelerating the drive towards a more sustainable future.  In this document, we call on the government to drive forward the UK’s leadership on sustainable finance.

The Policy Vision was published at an event to mark the organisation’s 30-year anniversary, which was joined by the Economic Secretary to the Treasury, John Glen MP, for a keynote speech. UKSIF’s 30-year anniversary falls at a significant milestone for the UK – the midway point between the Rio ‘Earth Summit’ in 1992 and the UK’s 2050 net-zero goal that will shape action over the next 30 years.

UKSIF’s 260+ members represent over £10trn in assets under management (AUM), and are a significant part of the UK’s financial ecosystem. They have a critical part to play in the change needed to progress the rapid decarbonisation of the economy and to address some of the pressing social issues facing the country post-Covid-19. As well as highlighting key areas for government and regulatory action, the Policy Vision recognises the responsibility of UKSIF and its members to promote a greener, fairer and more sustainable future.

The Policy Vision calls on the government to step up efforts to drive forward the UK’s leadership on sustainable finance, and sets out bold policy solutions across different sectors of the economy for the years ahead. This includes wide-reaching and ambitious recommendations on: the future of the UK’s sustainable finance standards post-Brexit, the net-zero transition, infrastructure investment, biodiversity policy, pensions, and other areas that UKSIF’s members see as vital in the push towards a sustainable future. While the UK has made good progress in recent years, there is much further to go to deliver the future UKSIF’s members want to see.

Now is an opportune time, particularly ahead of the UK’s hosting of the G7 and COP26 this year, to set out the sustainable finance community’s Policy Vision for the future. A summary of the report’s policy asks across eight different areas is below.

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Policy Vision Chapter Summaries

1. Making the UK a Leader on ESG Standards

The UK should now ‘lead the way’ in developing global sustainable finance standards. To demonstrate true leadership, the UK should seek to go beyond matching the ambitions of other countries, and draw on ‘best in class’ standards set by leading global standard-setters. As an immediate step, government should provide greater clarity to industry over the UK’s ‘green taxonomy’ to drive forward leadership post-Brexit.

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2. Facilitating a Net Zero Future

Government should provide clarity urgently on what net-zero means for each sector of the economy, providing net-zero strategies as soon as possible ahead of COP26 and embed consideration of net-zero into all decision-making. Government must work closely with industry on how the UK can move towards becoming the world’s first Paris-aligned financial system.

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3. Building the Green Economy at Home

Government must ensure the new National Infrastructure Bank has the necessary scale to deliver it net-zero mandate in practice. Separately, the UK should develop an ambitious investment programme to provide a faster stimulus to the ‘green economy,’ and commit to exploring social and sustainability-linked bonds ahead of COP26.

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4. Safeguarding our Natural Environment

Improving our collective understanding of biodiversity is a priority, including identifying the most impactful biodiversity issues investors should be alert to. UKSIF supports the UK to take a prominent role to shape the Taskforce on Nature-related Financial Disclosures (‘TNFD’) when it launches this year and embed this at home.

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5. Supporting a 'Just Transition' for the UK's Workforce

Creating a ‘Just Transition’ is a key priority. A UK ‘Just Transition Commission’ can determine a common language and develop policy priorities to begin this important work.

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6. Encouraging Diversity and Inclusion in all its Forms

We want greater disclosure within companies on a wide range of diversity issues, including mandatory ethnicity pay gap reporting at large companies. The UK should build on the Hampton-Alexander Review and commit to an initiative considering fresh targets for female board representation.

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7. Sustainability in Pensions and Savings

Government and regulators should seek ways to continue to upskill pension schemes in their understanding of climate change to protect savers, while the drive of the pensions industry towards net zero should continue at pace.

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8. Promoting Sustainability and Resilience Abroad

We want the UK to return to its 0.7% development aid target as soon as possible, while mandates for the UK’s international development bodies should explicitly include net-zero considerations to support the climate transition overseas.

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