The British government is poised to make a significant push to reduce regulatory barriers for businesses aiming to cut their emissions. This crucial initiative will be championed by Finance Minister Rachel Reeves, who is expected to unveil the commitment during her annual Mansion House address to London’s financial sector on Tuesday. She will be speaking alongside Bank of England Governor Andrew Bailey, emphasizing a renewed focus on supporting economic growth through sustainable finance, a key objective for the newly elected Labour government. 

At the heart of this new drive is a pilot project led by the Financial Conduct Authority (FCA), the Bank of England, and the partly government-backed Green Finance Institute. This collaborative effort will meticulously identify and assess the regulatory and other obstacles currently hindering projects designed to help businesses with high carbon emissions reduce their environmental footprint. A finance ministry source indicated that the “Transition Finance Pilot” is a focused segment of a larger strategy to unlock the economic potential of green finance, which the government believes could generate up to £270 billion (or £200 billion) in revenue for the economy. 

The pilot builds upon an external review of transition finance commissioned by the previous Conservative government, which was published last October. That review highlighted several significant barriers, including the inherent riskiness of unproven carbon-reduction technologies, uncertainty surrounding future government incentives, and concerns about reputational damage for companies undertaking projects that aim to reduce rather than entirely eliminate emissions. By addressing these specific hurdles, the government aims to foster an environment more conducive to climate investments. 

In a related policy development, the UK has recently abandoned its controversial “taxonomy plan” for green investments. This framework, intended to guide companies and investors on what constitutes a green investment, was deemed by the finance ministry as “not the most effective tool for delivering the green transition”. Instead, the government stated it would focus on other green policies to drive investment, acknowledging criticisms that the taxonomy was difficult to follow and not particularly useful. While the UK Sustainable Investment and Finance Association (UKSIF) expressed disappointment over this decision, they emphasized the continued need for rapid delivery of commitments regarding transition plans and sustainability reporting standards. 

Source :
https://www.businesstimes.com.sg/international/uk-government-make-new-push-cut-red-tape-businesses-aiming-cut-emissions 

https://www.reuters.com/sustainability/cop/uk-government-make-new-push-cut-red-tape-businesses-aiming-cut-emissions-2025-07-13/ 

https://energynews.oedigital.com/environment/2025/07/13/uk-government-to-reduce-red-tape-for-businesses-that-want-to-reduce-emissions