Press releases

UK fails to make climate change a priority in financial sector shake-up

Chancellor of the Exchequer Jeremy Hunt in a meeting with UK Prime Minister Rishi Sunak in Downing Street. Picture by Simon Walker for No 10 Downing Street on flickr.
Chancellor of the Exchequer Jeremy Hunt in a meeting with UK Prime Minister Rishi Sunak in Downing Street. Picture by Simon Walker for No 10 Downing Street on flickr.
  • The Chancellor of Exchequer set out the Edinburgh Reforms to drive growth and competitiveness in the financial services sector, failing to make net zero a statutory objective for regulators and giving financial regulators a mixed mandate that could increase the risk of a future financial crisis. 
  • An updated Green Finance Strategy will be published in early 2023. E3G calls on the government to put in place the standards needed to make the UK a global green finance leader and get on track to net zero. 

The future of UK financial services regulation  

The Financial Services and Markets Bill marks the biggest reform to the UK’s financial services sector since 2000.  An unfettered pursuit of competitiveness and growth led to the 2008 financial crash. The Edinburgh Reforms risk putting the UK on a similar collision course. Failure to embed climate change standards at the heart of regulatory reform threatens the future stability of the UK’s financial sector, and the UK’s ability to help to meet global challenges.  

E3G welcomes the Chancellor’s announcement to set out a Green Finance Strategy in Q1 of 2023. But achieving the world-leading UK Net Zero-Aligned Financial Centre promised by PM Rishi Sunak at COP26 will require further policy steps, including stronger regulation of the financial markets to comply with the net zero target and the creation of a Net Zero Investment Plan to guide market expectations as to how the Net Zero Strategy will be financed.    


Kate Levick, Associate Director at E3G said: 

“The financial sector is central to addressing the climate crisis. Unfortunately, today’s mandate changes and deregulatory moves do not set the UK on a sound path either to manage climate risks or to work with other jurisdictions to meet global challenges.” 

Ed Matthew, Campaigns Director at E3G said:  

“Failure to put net zero at the heart of these reforms can only increase the long term risk of financial system collapse” 

Eduardo Lopez, Researcher at E3G said: 

“The biggest threat to the UK’s financial system is climate change. Slow progress on greening the financial system combined with the pursuit of competitiveness will add further burden to the UK’s already fragile economy. To deliver the Net Zero-aligned Financial Centre announced at COP26, net zero needs to be at the core of financial regulation.” 

Available for comment 

Kate Levick, Associate Director, E3G (UK Sustainable Finance) 
m: +44 (0) 7860 861225,  

Ed Matthew, Campaigns Director 
m: +44 (0)7 827 157 906,  
Eduardo Lopez, Researcher, E3G (UK Sustainable Finance) 
m: +44 (0) 7901 085214, 

Notes to Editors 

  1. E3G is an independent climate change think tank with a global outlook. We work on the frontier of the climate landscape, tackling the barriers and advancing the solutions to a safe climate. Our goal is to translate climate politics, economics and policies into action. About – E3G 
  2. For further enquiries email or phone +44 (0)7783 787 863 


Subscribe to our newsletter