IPE's Rust: UK taxonomy group advises government to diverge from EU approach

06 September 2023

Government advisors have warned the UK not to repeat the mistakes of the European Union on corporate sustainability reporting, by ensuring that companies disclose against its green taxonomy before financial institutions are expected to do so.

The Green Technical Advisory Group (GTAG), which is helping the UK government decide which elements of the EU taxonomy rules to keep and which to rewrite in its national version, has also suggested changes to the key performance indicators (KPIs) to make the framework more useful and useable.
For similar reasons, GTAG has recommended that the government keeps the taxonomy focussed on clearly defining green economic activities rather than extending to cover transition or harmful activities.
The two reports are the latest pieces of advice from GTAG: last month it published recommendations on the benefits of applying the taxonomy more widely to government decisions and earlier this summer it delivered advice for how the UK’s green taxonomy should approach the concept of ‘Do No Significant Harm’ (DNSH).
In the coming weeks it is due to publish advice to the UK government from its usability and data workstreams.
In its advice on reporting KPIs, GTAG was very clear about the importance of sequencing reporting requirements, saying it “is a key matter to get right” and noting that “financial institutions are dependent on information disclosed by corporate clients and investee companies for their own reporting”....

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