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Britain scraps 'taxonomy' plan for green investments
Published by Global Banking & Finance Review®
Posted on July 15, 2025
2 min readLast updated: January 22, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on July 15, 2025
2 min readLast updated: January 22, 2026
The UK has abandoned its green investment taxonomy plan, opting to focus on other sustainable finance policies to drive investment and reduce greenwashing.
By Virginia Furness
LONDON (Reuters) -Britain on Tuesday ditched plans to release a "taxonomy" for guiding companies and investors on what is a green investment, the latest sign governments are stalling on sustainability reporting requirements for companies.
Taxonomies set out conditions for labelling an activity sustainable to help economies meet net zero targets. They were designed to drive more investment to green projects but critics say they are burdensome to comply with and not that useful in practice.
The finance ministry said it would focus on other green policies to drive investment, after finding the taxonomy "would not be the most effective tool to deliver the green transition and should not be part of our sustainable finance framework."
The decision comes as Europe undertakes a major overhaul of its own sustainability reporting rules for companies in a bid to slash red tape and bolster competitiveness.
The government said its consultation showed that the taxonomy would not deliver, "in a proportionate way", its objectives of channeling capital and reducing greenwashing
The UK Sustainable Investment and Finance Association said it was "disappointing" the government had concluded that a green taxonomy had no place in the UK's sustainable finance framework.
"We now want to see swift delivery of commitments on transition plans and the sustainability reporting standards," UKSIF head of policy and regulatory affairs Oscar Warwick Thompson said.
Britain first mooted plans to develop a taxonomy in 2020, but work was paused in December 2022 with the then-government saying it was a complex exercise linked to multiple sectors of the economy.
Gemma Woodward, head of responsible investment at wealth manager Quilter Cheviot, welcomed the decision, saying the industry was already contending with other regulations.
(Reporting by Virginia Furness; Editing by Tommy Reggiori Wilkes, Alexandra Hudson)
The UK government decided to scrap plans for a green investment taxonomy, stating it would not be the most effective tool for delivering the green transition.
The finance ministry concluded that the taxonomy would not deliver its objectives in a proportionate way, particularly in channeling capital and reducing greenwashing.
The UK Sustainable Investment and Finance Association expressed disappointment over the government's conclusion that a green taxonomy had no place in the UK's sustainable finance framework.
Plans for the green taxonomy were first proposed in 2020, but work was paused in December 2022 due to its complexity and links to multiple sectors of the economy.
The government indicated a focus on other green policies to drive investment and emphasized the need for swift delivery of commitments on transition plans and sustainability reporting standards.
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