COP26: UK firms forced to show how they will hit net zero

Most big UK firms and financial institutions will be forced to show how they intend to hit climate change targets, under proposed Treasury rules.

By 2023, they will have to set out detailed public plans for how they will move to a low-carbon future - in line with the UK's 2050 net-zero target.

An expert panel will set the standards the plans need to meet to ensure they are not just spin.

Any commitments will not be mandatory. Green groups say this is not enough.

Net zero is when a business or a country achieves an overall balance between the amount of carbon it is emitting and the carbon that it's removing from the atmosphere.

Firms and their shareholders will be left to decide how their businesses adapt to this transition, including how they intend to decarbonise.

And although the plans will need to be published, the government said "the aim is to increase transparency and accountability" and the UK was not "making firm-level net-zero commitments mandatory".

The market will decide whether firms' plans are credible, the Treasury said.

Speaking at the COP26 climate summit, Chancellor Rishi Sunak claimed the UK was leading the world in becoming the "first-ever net zero aligned global financial centre".

He said the changes would mean: "Better and more consistent climate data; sovereign green bonds; mandatory sustainability disclosures; proper climate risk surveillance; and proper global reporting standards."

In total, 450 firms controlling 40% of global financial assets - equivalent to $130tn (£95tn) - have agreed to commit to limit global warming to 1.5C above pre-industrial levels.