Here, we round up the key announcements, and what this means for investors.

Firstly, the updated ‘carbon budget delivery plan’ demonstrates that the UK is behind on its own Paris Agreement commitments to 2030, emphasising that we need to decarbonise faster and and legislate to achieve this. However, the ‘Powering Up Britain’ delivery plan presents little of the urgent action required. Disappointingly, most passages read as a plan for a plan, and there was little to no new green government spending announced.

The exception to this is a new emphasis on carbon capture and storage technologies (CCUS), as well as hydrogen – two potentially ‘big wins’ for climate change mitigation but very early in their real commercialisation and not easily investable for retail-friendly portfolios like ours. It was disappointing to see key barriers to the rapid scale-up of existing, economical, green technologies were not tackled by the policy paper, including windfall taxes on renewables, bottlenecks in planning permission and the ban on onshore wind.

We believe the ‘energy security’ announcements were a missed opportunity to scale up the UK’s local green economy, especially when the EU and US are heavily incentivising this through tax credits and grants. At EQ, our portfolios continue to seek the best solution-companies globally and we won’t restrict our outlook to the UK in times like this.

The Government’s new ‘Green finance strategy’ summarises how it wants to create a more sustainable financial sector through new methodologies & disclosure and also how it aims to increase investment flows to green activities.

At the highest level, this strategy confirms that sustainable investing is explicitly encouraged by the regulator, including encouraging private investors’ involvement. As a sustainable investor with a decade of experience, EQ is encouraged to see more interest from the regulator to create financial products that deliver real-world impact, create more stringent criteria for funds to counteract greenwashing and improve the sustainability disclosure in the market.

We are currently awaiting the release of the final sustainable fund labels (which we were consulted on), the UK green taxonomy – a list of business activities that should be targeted by sustainable investors, and explicit expectations on financial advisers to assess the sustainability preferences of their clients.