UK-EU are uniquely placed to drive global climate action ahead of COP28
A new report published today [25 October] by the City of London Corporation and Hogan Lovells looks at how the EU and UK are uniquely placed to lead the way in advancing global climate action and sustainable finance strategies in international forums ahead of COP28.
The report, Advancing Net Zero: The EU and UK in International Climate Action Forums, emphasises that the EU and UK are already closely aligned on net-zero ambitions with both having set some of the strongest national targets in the world and both being home to private sectors that are closely integrated and very ambitious.
The report explores how the EU and UK could leverage their influence in global forums like the G20 and G7 to endorse market standards and solutions, build coalitions for collective action, and promote a globally coherent approach to carbon pricing. It also calls for greater engagement with the business community such as the Glasgow Financial Alliance for Net Zero (GFANZ) to develop common approaches to transition planning.
The launch of the report comes as the Policy Chairman of the City of London Corporation, Chris Hayward, hosts a Brussels reception for 200 high-level guests, including representatives from EU institutions, member states, third countries, and major financial service businesses to discuss how the UK and EU can work together to address the challenges and opportunities of net-zero. It comes after the Policy Chairman held a series of bilateral meetings with EU officials to explore greater financial cooperation following the signing of the UK-EU MoU on Financial services.
The report recommends that the UK and EU should:
- Prioritise and facilitate engagement between standard setters, such as the International Sustainability Standards Board and European Financial Reporting Advisory Group, to enhance regulatory coherence around sustainability reporting.
- Consider G20 and G7 endorsement of market standards and solutions and work to ensure their effective implementation.
- Identify common priorities and work together to build strong coalitions within the G20 to catalyse action from key members within the group.
- Use the G7 climate club to develop a globally coherent and applicable approach to carbon pricing and develop incentives designed to hold members accountable.
- Ensure the EU-UK Regulatory Forum discusses and supports enhanced cooperation and coordination in international bodies.
Policy Chairman at the City of London Corporation, Chris Hayward, said:
“The EU and UK are like-minded jurisdictions and remain closely aligned when it comes to net zero ambitions. They have set some of the strongest national targets and have high private sector ambition. Given they are two of the strongest economies and extremely interlinked, it is important that they work together internationally to advance the global climate agenda.
“Climate change is a global challenge, and we will not overcome it unless we make progress together. The UK and EU should utilise the unique opportunity offered by EU-UK Financial Regulatory Forum to work together to set global standards, drive climate action and ultimately contribute to a more sustainable and resilient world.”
Financial Institutions and Insurance Sector Group Head at Hogan Lovells, Sharon Lewis, said:
“Ensuring the EU and UK continue to lead the world in driving climate action, requires not only the creation of new international forums, but also the consistent tackling of challenges and obstacles created – often unintentionally – and that is where this report comes in, particularly in relation to how they can better collaborate to improve their effectiveness to help progress the journey to net zero.”
Notes to editors
- The City of London Corporation is the governing body of the Square Mile dedicated to a vibrant and thriving City, supporting a diverse and sustainable London within a globally successful UK. www.cityoflondon.gov.uk
- GFANZ was launched in April 2021 by UN Special Envoy on Climate Action and Finance Mark Carney and the COP26 presidency, in partnership with the UNFCCC Race to Zero campaign, to coordinate efforts across all sectors of the financial system to accelerate the transition to a net-zero global economy.