The recent publication of the final Green Technical Advisory Group (GTAG) paper on the long-term ‘institutional home’ for the Green Taxonomy is a suite of nine GTAG papers that have summarised the independent advice the GTAG has offered to the Government since the inception of GTAG in June 2021.

Since the UK announced its plan to introduce a Green Taxonomy and establish GTAG to advise on design and implementation issues, an additional 21 taxonomies have been announced or come into force globally, reaching 47 across the world. But the considered approach to introducing a Green Taxonomy in the UK has brought benefits. Principally, the opportunity to learn from the efforts of those implementing taxonomies in other regions: what has worked well and what has worked less well.

The green taxonomy will also play an important role in tackling greenwashing. UK capital markets – which are some of the deepest in the world and internationally focused – are concerned about the number of taxonomies proliferating globally that they may have to report against. However, this too is an opportunity to understand the teething problems experienced with taxonomy reporting elsewhere, which GTAG has noted principally hinge on the definition of ‘do no significant harm’ criteria and the approach to key performance indicator reporting, and responding with an iteration of these elements that others can also adopt.

This is a precedent we are already seeing play out as the EU looks to the UK approach to fund labelling as it seeks to work through reforms to the Sustainability-related Financial Disclosure Regulation. In this way, a path toward harmonisation can be created across jurisdictions as one learns from another, reducing the friction in reporting for obligated firms, seeing the emergence at a company level through the innovation of the International Sustainability Standards Board.

GTAG’s membership will now wait for Government consultation due in Autumn.

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