On January 16, the House of Lords European Union Committee published a letter from the Chair, Lord Kinnoull, to John Glen, Economic Secretary to Her Majesty’s Treasury (the Letter). The Letter concerns the recently published Taxonomy Regulation (for more information please see the January 10 edition of Corporate & Financial Weekly Digest).
In the Letter, Lord Kinnoull raises a number of questions regarding the Taxonomy Regulation. While some questions are procedural, most of the questions concern the interaction between the new regulation and Brexit.
One of Lord Kinnoull’s questions is whether, post-Brexit, the UK Government will seek to align legislation produced in response to their Green Finance Strategy (available here) with the EU legislation produced in response to European Commission’s (the Commission) Sustainable Finance Action Plan. The Taxonomy Regulation is one such piece of legislation.
Lord Kinnoull also observes that the Taxonomy Regulation represents a compromise between EU Member States regarding nuclear energy. Some Member States were in favor of designating nuclear energy as an “environmentally sustainable economic activity,” but other countries did not support this view. Instead, nuclear energy is not mentioned in the Taxonomy Regulation but is expected to be designated a “transition activity” (i.e., an activity which supports the transition to a climate-neutral economy).
In the Letter, Lord Kinnoull notes, “the importance the [UK] Government attaches to the nuclear energy industry,” and queries whether the UK Government intends to follow the EU’s lead in this regard.
Finally, Lord Kinnoull turns to the Platform on Sustainable Finance. This group — to be chaired by the Commission and include scientists, policy-makers and private-sector stakeholders — will advise and assist the Commission in developing the delegated acts required by the Taxonomy Regulation. Lord Kinnoull queries whether the “proposed composition of the Platform . . . will allow the UK to maintain influence over the formulation” of the delegated acts following Brexit.
The Letter is available here.