FCA announces future work on climate change and green finance

The FCA has published a feedback statement setting out its proposals to improve climate change disclosures by issuers and information to consumers on green financial products and services.

The Statement identifies a number of priorities, which will provide a foundation for the FCA’s future work on climate change and green finance. These include issuers’ climate change disclosures, regulated firms’ integration of climate change risk and opportunities into their decision-making and consumers’ access to green financial products and services.

Andrew Bailey, Chief Executive of the FCA said:

‘We have an important role to play in creating an environment where firms can manage the risks from moving to a greener economy and capture the opportunities to benefit consumers.

‘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.’

The Feedback Statement sets out the key actions it will take in each of these areas, including:

  • consulting on new rules to improve climate-related disclosures by certain firms and clarifying existing obligations
  • finalising rule changes requiring Independent Governance Committees (IGCs) to oversee and report on firms’ environmental, social and governance (ESG) and stewardship policies, as well as separate rule changes to facilitate investment in patient capital opportunities
    publishing a feedback statement in response to a joint Discussion paper with the Financial Reporting Council (FRC) on Stewardship setting out actions to address the most significant barriers to effective stewardship
  • clarifying its expectations around consumers’ access to green financial products and services and taking appropriate action to prevent consumers being misled

The FCA will also continue to contribute to several collaborative initiatives, including the Government-led cross-regulator taskforce on disclosures and the Climate Financial Risk Forum (CFRF), which they established with the Prudential Regulation Authority (PRA) earlier this year.

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