Some large companies will have to start publishing the impact they have on the environment, under new rules announced by the Chancellor on Monday.
The Government said the new plans will make it easier for customers to decide where to shop, for investors to place their money, and for businesses to decide which suppliers to choose.
The rules will apply to certain large businesses, pension schemes, investment products and asset managers.
While most people in the UK want their money to go to good causes, the lack of shared definitions has allowed companies to move the goalposts to fit their own businesses.
This “is leading to greenwashing, misleading investors and consumers about how green a product really is,” the Government said.
We want sustainability to be a key component of investment decisions, and our plans will arm investors with the right information to make more environmentally-led decisions
Chancellor Rishi Sunak
Chancellor Rishi Sunak said: “We are already a world leader in green finance, and today’s roadmap will give us the opportunity to set new global standards for sustainability that will boost the economy, protect the planet and support our net zero goals.
“We want sustainability to be a key component of investment decisions, and our plans will arm investors with the right information to make more environmentally-led decisions.”
A new Government report lays out what changes will be needed to give investors and consumers the information they need to make decisions.
Mr Sunak first announced the plans at his Mansion House speech earlier this year. The plan will bring together existing reporting requirements on the climate.
Ministers are preparing for next month, when the UK will host global leaders at the Cop26 climate conference in Glasgow.
The UN conference is seen as an opportunity to ensure that countries around the world live up to the targets to limit global warming which were set in the 2015 Paris Agreement.
In the run-up to the conference many large businesses have announced plans to slash their emissions to “net zero” by the middle of the century. This is in line with the plan for the UK as a whole.