The UK government has abandoned plans to introduce a green taxonomy mirroring its EU counterpart, following negative feedback from its consultation.
In a statement released by HM Treasury today, the government announced that it will no longer pursue the introduction of a green taxonomy, a classification system that would have explicitly defined which economic activities or assets are sustainable, after encountering significant scepticism from industry stakeholders.
According to the statement, more than half of the respondents to the consultation expressed doubts about the value of implementing such a taxonomy, which was intended to address greenwashing.
Responses came predominantly from the private sector, as well as legal professionals, charities and NGOs. “The concern largely centred around the real-world application of this policy, primarily driven by experience of working with other taxonomies, and concerns over the extent to which taxonomies were delivering on desired objectives,” the government said.
While the EU introduced its sustainable taxonomy in 2020, the framework has attracted controversy, particularly over whether certain economic activities, such as nuclear energy, can genuinely be classed as sustainable.
The UK government also noted that around a third of respondents felt that alternative measures, such as the introduction of the UK Sustainability Reporting Standard (UK SRS), transition plans, and sector roadmaps, could offer more effective ways of tackling greenwashing.
Policy makers are still seeking industry feedback on the introduction of mandatory transition planning strategies for financial organisations in the UK, the consultation is remains open until mid-September.
