Some of the world’s most powerful climate finance groups are lobbying the UK government not to categorize natural gas as a green investment.
The energy source would undermine the UK’s proposed regulation for environmentally responsible investments, according to the chief executives of the Institutional Investors Group on Climate Change, Principles for Responsible Investment, and UK Sustainable Investment and Finance Association.
Ethical investors who prefer not to support fossil fuels are increasingly at odds with governments seeking to assure energy security in the wake of Russia’s invasion of Ukraine, which poses a threat to supplies. The debate over natural gas has already begun in the European Union, with some gas projects being proposed as sustainable.
The fundamental objection to natural gas being included in the taxonomy is that it is not green, said Stephanie Pfeifer, CEO of the IIGCC, which represents over 51 trillion euros ($54 trillion) in assets under management. There may be a legitimate role for natural gas as a ‘bridge’ during the energy transition, but this should not be interpreted as gas equating to green. The UK government has an opportunity here to demonstrate world-leading ambition on climate, said David Atkin, CEO at the PRI, which represents over $121 trillion in funds. The UK’s taxonomy can and should aim to demonstrate maximum alignment with a science-based transition.