United Kingdom

Although the UK lacks a specific SDG implementation strategy, the Climate Change Act now legally commits the UK to net-zero by 2050; the Clean Growth Strategy (2017) lays out a decarbonisation plan focussed on accelerating "clean growth" at lowest cost for taxpayers and maximum social and economic benefit. The strategy allocates GBP 2.5 billion up to 2020, and includes regular progress assessments from independent advisory boards. However, the plan is notably vague as to post-2020 planning though the independent Committee on Climate Change (CCC) is empowered to develop and recommend clearer proposals.

Specific areas of policy are frequently opened for public consultation, including on a gender-sensitive basis. There is no mandated employee involvement in corporate governance, and the government is yet to hold public consultations specifically on sustainable development. The recent trend towards using referenda to settle questions of public policy has had mixed results.

No national SDG business strategy currently exists. The national framework for incentivising SDG compliance is weak and self-contradictory in places. A national review of business engagement with the SDGs is underway but will be purely voluntary. EU laws require large firms (+500 staff) to report on social and environmental impacts, but post-Brexit arrangements are unclear and likely to include lower standards.

The UK is a leader in the field of natural capital accounting, with a Natural Capital Committee (NCC) providing independent advice and annual reports to the government on ecosystem services and national natural assets. Human, cultural and social capitals as yet lack detailed statistical accounting, but the Office for National Statistics (ONS) 2020 Natural Capital Roadmap is exploring wealth accounting and links with other capitals.

Green finance is featured extensively in the Clean Growth Strategy, but corporate reporting requirements on sustainability are weak and there are few disincentives for investing in the brown economy. The Government has endorsed the recommendations of the Bank of Englands Task Force on Climate-Related Financial Disclosures, and is working on national standards to clarify the sector for international institutions.

The Bank of England is a global leader on climate finance and has developed a range of tools to address environmental risk in financial sectors including decarbonising its corporate bond purchase scheme, mandating the disclosure of climate-related financial risk for banks and insurers and re-calibrating its capital framework. Internationally, the Bank plays a significant role as a founding member of the Network for Greening the Financial System, has hosted workshops for other central banks on climate-related financial risk and has been vocal in its support for the Taskforce for Nature-related Financial Disclosures.

In line with the commitment to net zero by 2050, the UK has emissions trading schemes and sovereign green bond offerings in place as policy tools to encourage the transition. However, experts at the New Economics Foundation suggest the current policy approach is overreliant on deregulation, disclosure and transparency - lacking the proactive steps needed to meet the UK's ambitious climate goals and shift finance from dirty to green sectors (for example, by adopting tools such as a Green Term Funding Scheme for green loans, or a Green Capital Requirement to disincentivise dirty lending). HM Treasury's recently published Net Zero Review also made no reference to greening the UK tax system which provides over 12 billion annually in tax concessions for both the domestic consumption and production of fossil fuels.

The Bank of England runs mandatory annual financial stress tests of the largest UK financial institutions to inform regulatory policy. In 2019 the Bank confirmed that its assessment procedure will be expanded to include environmental and climate change risks making the UK financial system the first in the world to adopt mandatory climate-stress tests. In June 2021, the Bank of England launched its 'Climate Biennial Exploratory Scenario' (CBES) stress test, covering 19 banks and insurance companies. The test reviews 3 climate scenarios over a period of 60 years, assessing physical, transition and litigation climate-related risks - raising the bar for a new generation of stress testing in terms of granularity and approach. Final aggregate results are due to be published in May 2022.

The UK currently participates in EU Emissions Trading System, although the EU-ETSs oversupply of permits and resulting ineffectiveness led the government to introduce a national Carbon Price Floor in 2013. The CPF has led to impressive reductions in emissions from the UKs electricity sector. A contingency carbon tax to replace the EU-ETS has been announced in the event of a no-deal Brexit, but significant uncertainties remain.

Although the UK does not have a specific agency responsible for green sectoral policy, the 2017 Clean Growth Strategy does lay out sustainability criteria for specific sectors, including transport, housing, electricity, land use etc. Targets for the waste sector are particularly ambitious, with a goal of zero avoidable waste by 2050, and new petrol & diesel cars will be banned from 2040.

No centralised programme for green SMEs currently exists, although some innovative financial incentives and training programmes have been launched to support small firms going green, especially in the area of energy efficiency. A solid legal structure supporting social enterprises has been established, encouraging growth in triple-bottom-line entrepreneurship. Some fiscal support in the form of Social Investment Tax Relief (SITR) for those who invest in social returns.

The UKs pioneering Climate Change Act (2008) established legally binding carbon budgets to 2050, with an independent advisory body providing oversight and review. In June 2019 the government amended the Act to legally commit the UK to net-zero carbon by 2050, the first country in the world to do so. However, some government policies remain inconsistent with existing carbon budgets (eg: airport expansion), and the targets omit imported carbon, a major factor in a service-based economy like the UK.

Strong growth in off-shore wind has seen the share of renewables in the UK electricity grid grow rapidly, with coal in particular being displaced. Yet contradictory government policy (including scrapping subsidies for domestic solar and banning on-shore wind development) and slow progress in heat & transport sectors means that the country will likely miss its 2020 targets for 20% final energy consumption from renewables. In addition, the government has so far refused to commit to new clean energy targets post-Brexit.

The UK is one of the most unequal countries in Europe as measured by Gini co-efficient, and the country lacks any overall strategy for reducing inequality or implementing a green social transition. There has been some integration of sustainability and social policy, with support for vulnerable households and the creation of green jobs listed as government priorities, but policy so far has lacked detail and had mixed impact on sustainability and inequality.

Since the 2008 financial crisis, UK spending on social welfare programmes have been under pressure. Broadly speaking, there is no clear green transition strategy for poorer or marginalised groups. Some research has been undertaken on the integration of environmental sustainability and social support, for example in the fields of fuel and energy poverty, and the government has cancelled some planned green measures because of the likely impact on the poorest (eg: a tax on fat).

Regular online consultations are held in the UK, and public policy audits include impact assessment indicators for specific vulnerable groups. Policymakers are required to assess the impact of new policies on marginalised groups under the Public Sector Equality Duty provisions of the 2010 Equalities Act. It remains unclear how much impact public consultations have on government policy, with policies regularly going ahead with minimal amendments or limited impact assessments.

The direction of travel on UK social protection is largely regressive. Services including housing, planning, transport and culture have seen their budgets slashed in half since 2009-10, and serious questions remain around the consolidation of existing support programmes into the "Universal Credit" scheme. There are few pilots schemes for innovative social protection policy, and no strategy for integration with challenges of a transition greener economy.

The UK is one of the most nature-depleted countries in the world, and existing policy is doing little to halt loss of habitat and biodiversity; almost all the UKs 2020 nature targets will be missed. The country has no specific national strategy on SDGs 14 and 15, although some innovative work has been done in British Overseas Territories. Existing legislation is weak both domestically, where economic development continues to out-prioritise conservation, and internationally, e.g. on unsustainability of imports.

The UK is a leader in the field of natural capital, with long-running national capital accounting surpassing the work done at the EU level. The partial asset value of UK natural capital was estimated to be 761 billion in 2015, of which 58% was attributable to cultural and regulating services such as recreation, pollution removal and carbon sequestration. Existing natural capital accounts do not yet distinguish between value for different communities or purposes.

The UKs Natural Capital Committee is an independent advisory committee which reports to the government on the relation between public policy and natural resources, and the benefits derived from natural assets such as forests, rivers, food, clean water and air. Though influential in shaping the UKs 25-year environment plan, it is restricted to an advisory role only and has limited influence on some policy decisions, e.g. on infrastructure.

The UK has a relatively progressive environmental tax framework, with green taxes contributing around 7.5% of total tax take, primarily from fuel duties. Particular successes include the landfill tax, which has reduced waste to landfill by 80% since 1995 and the plastic bag charge. However some policies continue to incentivise the destruction of natural capital, including subsidies for North Sea Oil production and the ongoing provision of tax concessions (worth over 12 billion annually) for both the domestic consumption and production of fossil fuels. Adopting a conveniently narrow definition of subsidies (which did not include tax relief), HM Treasury's recent Net Zero Review proposes options for introducing new environmental levies (including expanding carbon pricing to include gas) - but this makes little sense without acknowledgement of, and a plan to phase-out, existing fossil fuel tax breaks.