Brexit Bites Back: Two-Thirds of British Financial Giants Shift Sustainability Goals Away From Unsupportive UK Market

According to a report by the UK Sustainable Investment and Finance Association (UKSIF), two-thirds of the largest financial services firms operating in Britain are either planning to move or have already moved some investments out of the country and into more supportive markets for their sustainability goals due to the UK’s failure to complete its sustainable finance framework. This puts at risk billions of pounds worth of funding that could otherwise flow into Britain. UKSIF surveyed 400 companies from various industries, including finance, transport, and real estate, and found that more than £100bn in capital flows could be attracted to Britain if certain key policies were adopted. However, the UK government has repeatedly backtracked on green policies, causing a loss of confidence among investors. The UK is currently playing catch-up with the EU in terms of regulatory frameworks for environmental, social, and governance investing, and it has yet to complete its regulatory toolkit to enable investors and issuers to fully understand non-financial risks and opportunities. UKSIF has urged the government to accelerate work around its sustainability policies, including mandating transition plans, completing the taxonomy, and addressing risks to biodiversity by supporting new international reporting standards. Failure to do so could result in the UK losing its position as a leader in sustainable finance to other regions such as Europe, Asia, and North America. As the UK faces a crucial inflection point, it must choose between closing the remaining gaps and benefitting from the progress made in sustainable finance, or losing its position as a leader.