Earlier last week (1st July 2021) Chancellor of the Exchequer, Rishi Sunak, gave his first speech at Mansion House, to an audience of young and aspiring leaders in Financial Services. During his speech, he outlined his roadmap to “ensuring UK financial services remain competitive now that the UK has officially left the European Union”.
His roadmap focussed specifically on developments the UK plans to cement their place as leaders in Green Finance and said his plan has been designed to make the UK – “More open, more competitive, more technologically advanced, and more sustainable – that is our vision for financial services. The Roadmap we are publishing today sets out a detailed plan for the next few years – and I look forward to delivering it, together.”
Green Finance
One of the key talking points surrounding his speech was the desire to ensure the UK kept its place as world leader in Green Finance. This area of development has in place several key points sure to continue boosting the UK’s standing. This includes:
Further reporting transparency
The Chancellor announced plans for businesses to begin submitting ‘Sustainability Disclosure Requirements’ – a new initiative from the government which requires companies, pension schemes, financial services firms, and their investment products to report on the impact they are having on the climate and environment – as well as the risks and opportunities facing their business. These new documents will bring together and streamline existing climate reporting requirements and go further to ensure consumers and investors have the information they need to make informed investment decisions and drive positive environmental impact.
These new legislations are planned to be delivered during the Governments announcement on its approach to Green Finance ahead of the COP26 Summit later this year.
Quality Stamps
With over 70% of the British Public claiming they want their Investments to avoid harm and achieve good for both people and the planet, the government plans to work with the Financial Conduct Authority (FCA) to create a new sustainable investment label so that customers are able to clearly compare the impacts and sustainability of their investments.
More Green Projects
It was also revealed that further details on the types of Green Projects eligible for funding are set to be announced when the UK issues its first-ever sovereign green bond, known as a green gilt, later this year. Green projects like zero-emissions buses, offshore wind, and schemes to decarbonise homes and buildings are set to be eligible for funding, with around £15 billion of green gilts issued this financial year.
Ensuring accessible finances at the forefront of technology and innovation
During his speech, the Chancellor outlined how the UK has been supporting innovations and the adoption of new cutting edge technologies during its financial revolution but stressed the importance of having the right protections in plans to protect access to cash, with legislations planned to ensure this. This includes a newly published consultation which included details on new laws ensuring people only need to travel a reasonable distance to pay in or take out cash and plans to allow the FCA the powers that it needs to hold firms accountable to ensure they meet these requirements.
Alongside the legislation that has already been passed to enable cashback without a purchase, these proposals will support the continued use of cash in people’s daily lives and help enable local businesses to continue accepting cash by protecting deposit facilities.
Ensuring a competitive marketplace
During his speech, the Chancellor outlined further consultations planned on reforms to the regulation of wholesale capital markets and a fundamental review of the prospectus regime following the recommendations laid out in Lord Hill’s listing review, which included a review focussing on the rules surrounding what information companies have to publish when raising finances to make the process simpler, more agile and more effective. These reforms are planned to create a levelled playing field and deliver a rulebook that is fair, outcomes-based, and supports competitiveness in the market, whilst ensuring at all times that the UK maintains high regulatory standards.
Establishing the UK as an open and global financial hub
The Chancellor highlighted new ground-breaking financial services partnership agreements, including those with Singapore and Switzerland, and outlined how the UK will use its strengths as a global financial hub to establish and enhance strong relationships with jurisdictions all around the world, whilst seeking closer links with advanced and emerging financial centres.
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