The Environmental Audit Committee is examining the role of HM Treasury in shaping the UK’s response to climate change, nature loss and wider environmental sustainability. As the Government’s central economic department, HM Treasury plays a key role not only in fiscal decision-making, but also in setting the economic frameworks through which climate and environmental issues are understood across Government.

CIEEM’s response to the Environmental Audit Committee inquiry argues that the UK economy is fundamentally dependent on healthy natural systems, yet HM Treasury’s current fiscal frameworks continue to treat environmental degradation as an externality rather than a material economic risk. The submission contends that GDP-centred decision-making, short-term fiscal constraints, and a tax system that incentivises environmentally damaging activities are incompatible with long-term nature recovery, and that delayed investment in climate and biodiversity will generate far greater future costs.

CIEEM calls for nature to be recognised and funded as essential public infrastructure, for stronger statutory mechanisms to drive demand for high-integrity nature restoration, and for mandatory nature-related financial disclosures aligned with the TNFD framework.

Underpinning all of these recommendations is the Institute’s central argument that ecological expertise is a strategic national asset that should be embedded meaningfully across government, financial institutions, and corporate governance to ensure that economic decision-making properly accounts for ecological limits and environmental risk.