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Highlights
- The UK government has announced a task force that will push financial services companies to publish their plans to reach net-zero emissions by 2050.
- The plans will boost the ability of investors to hold company boards and management accountable.
With countries around the globe struggling to agree on and meet climate change targets, the UK government has taken another step in its bid to be the world's first net-zero aligned financial centre. As part of its efforts, the government has announced a task force that will establish best practices for companies working in the financial sector to publish their plans to reach net-zero emissions by the middle of the century.
The balance between the release of greenhouse gases and their elimination from the atmosphere is known as net-zero.
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Transition Plan Taskforce
Called the Transition Plan Taskforce (TPT), the group will consist of leaders from the industry, academia, regulation and civil society. It will be responsible for determining a 'gold standard' for transition strategies and lend support to the government's efforts to fight greenwashing or inflated green credentials. It will also develop suitable templates to be incorporated into the UK's regulatory frameworks. The Financial Conduct Authority (FCA) will officially engage with the group, while other interested financial regulators will be invited as observers. TPT will report its first findings by the end of this fiscal year.
The transition strategies will help in the effective exercise of market discipline and also boost the ability of investors to hold company boards and management accountable, read an announcement from the TPT. The government also expects to see the publication of company-level transition plans become the norm across the country's economy.
Let us take a look at three FTSE-listed firms that offer financial services and how their stocks reacted to the development.
HSBC Holdings Plc (LON: HSBA)
HSBC Holdings Plc is a British financial services holding firm having operations in 64 countries across the globe. Recently, the company announced executive changes and appointed Geraldine Buckingham as an independent non-executive Director of the company with effect from 1 May 2022.
The FTSE 100 constituent has a current market cap of £105,312.28 million, and its stock price has appreciated by 21.93% over the last one year as of 25 April 2022. The year-to-date return stands at 13.85%. At 8:38 am GMT+1 on 25 April 2022, HSBC Holdings Plc’s shares were trading at GBX 512.80, down by 2.01%.
Lloyds Banking Group Plc (LON: LLOY)
Lloyds Banking Group Plc is based out of the UK and operates through three key divisions - Retail and Insurance, Commercial Banking, and Wealth. The FTSE 100-listed group has a market cap of £32,200.46 million and has given a return of 7.42% to its shareholders over the last one year. The year-to-date return stands negative at 4.21%. Lloyds Banking Group's shares were trading at GBX 45.55, down by 1.22%, at 8:55 AM (GMT+1) on 25 April 2022.
Aviva Plc (LON: AV.)
Aviva Plc is an insurance service provider with operations in the UK, Canada, China, and Ireland. The company announced significant strategic progress in its full-year results for the year ended 31 December 2021.
With a current market cap of £16,400.46 million, the FTSE 100-listed company has delivered a return of 21.93% to its shareholders over the last one year as of 25 April 2022, while its year-to-date return stands at 7.07%. Aviva Plc’s shares were down by 1.62% at GBX 430.70 on 25 April 2022 at 9:12 am GMT+1.
Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
Tags: Financial services stocks, Net Zero, HSBC Holdings, Lloyds Banking Group, Aviva
