The uk-eu relationship in financial services

participating in the broader thinking, in the longer term, about climate-
related capital requirements as part of international fora such as the 
Basel Committee.”
286
225. The UK’s focus on this area was also emphasised by Edwin Schooling Latter 
of the FCA:
“we have sought to move quickly and take a leading position in ESG 
[Environmental, Social and Governance] matters. I think we were the 
first jurisdiction, at least with a global financial centre, to ask listed 
companies to make disclosures in line with the global model set out by 
the Task Force on Climate-Related Financial Disclosures”.
287
226. Many witnesses agreed that this was an area that needed an internationally 
coordinated approach. Edwin Schooling Latter saw a “very strong case for 
global standards here. After all, the climate is a global issue.”
288
Stéphane 
Boujnah of Euronext saw green taxonomy as an area for cooperation, in 
which the UK and the EU could “definitely lead because the two societies 
and the two peoples have the same preferences on climate change”.
289
Rachel 
Kent of Hogan Lovells argued that “Five [green] taxonomies across the 
globe is not helpful”, adding, “How does the UK participate in that to make 
sure that we do our part and help to maintain a leading financial centre but 
at the same time do not cause unnecessary fragmentation?”.
290
227. Similarly, the UK Sustainable Investment and Finance Association (UKSIF), 
which represents the UK sustainable finance sector, considered that:
“very, very contrasting rules on taxonomies between the UK and EU 
could be damaging, and mean that firms in the UK will need to follow 
one set of taxonomy requirements for products marketed in EU markets 
and a separate set of requirements in the UK … [however] some of the 
significant issues we have seen with some of the EU’s rules, such as 
its ‘green taxonomy’ and … [the EU Sustainable Finance Disclosure 
Regulation] … will need to be remedied as a priority in the UK’s regime, 
meaning a degree of divergence will be necessary.”
291
286 
Q 53
287 
Ibid.
288 
Ibid.
289 
Q 91
290 
Q 5
291 Written evidence from UK Sustainable Investment and Finance Association (
RFS0007
)

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57
THE UK-EU RELATIONSHIP IN FINANCIAL SERVICES
228. In contrast to FinTech, where the UK is already recognised as a world-leader 
and as having a head-start compared to the EU, there was also a widespread 
acknowledgment that the EU’s own endeavours in green finance were already 
well-advanced.
292
Andrew Pilgrim noted that: “We have seen the EU take 
an early lead, particularly in terms of taxonomy … and it will be important 
for the UK to show that it is equally prioritising this very important issue 
but also thinking a little further ahead.”
293
Lord Hill did consider, however, 
that although “on green finance the Europeans are getting a crack on”, they 
are “going down a heavy and convoluted route” in their regulation of the 
sector.
294
Several other witnesses were also critical of the EU’s approach to 
the regulation of green finance.
295
229. Witnesses broadly agreed that there was a need and an opportunity for 
the UK to move quickly in this area. Peter Bevan of Linklaters pointed 
to the “incredible importance of transforming our economy to a more 
sustainable one in future,” seeing “the use of the financial sector to drive 
that transformation [as] clearly critical”.
296
Rachel Kent pointed to the UK’s 
reputation for innovation, with the financial services sector acting as an 
“accelerator” in this. She saw the sector as capable of being “an accelerator 
of ESG issues, because they are not just large firms that have ESG issues in 
their own right; they also lend money.”
297
230. UKSIF acknowledged the leadership that the UK had shown so far with 
regard to sustainable finance and regulatory policy but saw there as being 
more that could be done to further advance the UK’s “pre-eminent leadership 
position on sustainable finance”. It supported “as much consistency as is 
possible between the UK and EU’s sustainable finance regulations … but 
this should not come at the expense of implementing robust, world-leading 
regulations here at home”. In this regard, it urged the UK to “learn from the 
EU’s experience with its ‘green taxonomy’” and “implement a robust ‘green 
taxonomy’ that sets the highest standard possible for green investment for 
the rest of the world to follow and is purely based in science”.
298
231. For the Government, the Economic Secretary cited the UK’s championing 
of the international sustainability board at COP 26 and the UK’s “common 
heritage with the EU in this area,” adding that the UK had “worked very 
closely with the [EU] on the development of the EU taxonomy when we were