The FCA has today 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 FCAs 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.
FS19/6:Climate change and green finance
DP18/8:Climate change and green finance
TheClimate Financial Risk Forumbrings together regulators, banks, insurers and others to develop practical tools and approaches to advance the sectors response to the financial risks posed by climate change.
In July 2019, we published aJoint Declaration on climate changetogether with the Prudential Regulation Authority (PRA), Financial Reporting Council (FRC) and The Pensions Regulator (TPR) welcoming the Governments Green Finance Strategy and setting out our commitment to working collaboratively to address the risks of climate change.
On 1 April 2013, the FCA became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA).
The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this, it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.