The UK needs to create a watchdog to oversee the market for carbon offsets amid concerns that the current lack of transparency risks keeping companies and investors away, according to pensions provider Scottish Widows.
(Bloomberg) — The UK needs to create a watchdog to oversee the market for carbon offsets amid concerns that the current lack of transparency risks keeping companies and investors away, according to pensions provider Scottish Widows.
Having a regulator would help address the “opacity of the voluntary carbon market” which currently “breeds mistrust,” Scottish Widows said in a report published on Tuesday. Stricter oversight would enable companies “to allocate money with confidence,” it said.
The UK government should also lead the way in requiring economy-wide reporting under the Taskforce on Nature-related Financial Disclosures, Scottish Widows said. The goal is to “bolster” investing rules and strategies to minimize harm to and help restore nature, it said. That’s as biodiversity loss presents systemic risks to the industry, it said.
“The financial services industry has yet to make ample progress on nature action,” Maria Nazarova-Doyle, head of responsible investments and stewardship at Scottish Widows, part of Lloyds Banking Group, said in a statement.
The pension industry, which manages about $60 trillion in client funds, must work with policymakers to do more “to engage and educate the industry on how to positively reshape portfolios and avert ecological collapse,” she said.
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