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Climate Change & Green Finance

FCA: Climate Change & Green Finance

21st October 2019

The FCA has now published a Feedback Statement that sets out its proposals to improve climate change disclosures by issuers and information to consumers on green financial products and services.

This follows on from the FCA’s previous discussion paper on the topic (DP18/8) which we have previously discussed (see Climate Change, Green Finance and Managing Financial Risk). The latest Feedback Statement, FS19/6, entitled ‘Climate change and green finance’ identifies a number of priorities which aim to provide the foundation for the regulator’s work on climate change and green finance, including:

There are a number of key actions that the Feedback Statement lays out that addresses each of these areas, such as:

In July this year, the FCA also published a Joint Declaration on climate change together with the PRA, the Pensions Regulator (TPR) and the Financial Reporting Council (FRC). This declaration welcomed the Government’s Green Finance Strategy and laid out a commitment to work collaboratively to address the risks posed by climate change.

In addition, earlier this year, the FCA and PRA established the Climate Financial Risk Forum (CFRF) that brings together regulators, banks, insurers and others to develop practical tools and approaches to advance the industry’s response to the financial risks posed by climate change.

Following their latest Feedback Statement, the FCA has said that in addition to their priorities set forth in FS19/6, they will also continue to contribute to several collaborative initiatives, including the CFRF and the Government-led cross-regulator taskforce on disclosures.

The Chief Executive for the FCA, Andrew Bailey said:

“This Feedback Statement is the next step in our drive to provide clarity for firms and consumers about how our work will help support the response to the climate challenge and the development of the green finance market.”

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