The House of Commons cross-party Environmental Audit Committee (EAC) is today launching a new inquiry into the Treasury’s role in shaping decisions on climate, nature and the environment across government.

MPs on the Committee will explore whether the Government’s fiscal rules constrain environmental policy, how decisions made in the Treasury, the Government’s central economic department, influence the UK’s overall approach to climate change, nature loss and environmental sustainability, and ensure that the UK remains on track to meet its legal obligations on the environment.

The inquiry will also consider how the Treasury assesses the long-term economic risks presented by climate change and biodiversity loss. MPs will question whether climate and sustainability are recognised as reducing risks to the UK economy and contributing to the Government’s growth agenda.

Specific questions the Committee may consider include:

How fiscal rules and spending constraints affect investment in climate and environmental policy

• How measures such as sustainability and natural capital inform Treasury decisions, alongside traditional measures such as gross domestic product (GDP)
• To what extent environmental duties, such as the Environmental Principles Policy Statement, are applied in Treasury policy decisions
• What progress the Government has made in implementing recommendations from the Dasgupta Review on the Economics of Biodiversity

Chair of the Environmental Audit Committee, Toby Perkins MP, said:

“Decisions made in the Treasury have an extraordinary influence on the environment. Without funding and support from the economic heart of government, major initiatives such as species protection, adaption to a changing climate, and the net zero transition will falter.

“Our new inquiry will explore how this department, so influential across government, is considering the environment in its overall approach and choices.

“For instance: how do fiscal rules and spending limits impact investment in tackling climate change? Do ministers recognise the contribution of environmental policy towards growing the UK economy, and appreciate the risks to our economic system if we fail to act? Are there cases where Treasury decisions might undermine its environmental aims?

“Our inquiry is a vital opportunity to ask these and many more questions, to hold Treasury ministers to account for their enormous influence on the future of our precious environment.”

The inquiry is now accepting evidence and welcomes submissions from anyone in response to the questions in the call for evidence. Deadline to submit evidence is Thursday 21 May 2026.

Click here for more information about the EAC inquiry: HM Treasury and the economics of climate and nature