FCA outlines plans for Green Finance

The UK’s Financial Conduct Authority (FCA) has issued a feedback statement which outlines its proposals to improve climate change and green financial products.

Its new document identifies several priorities which will serve as the foundation for the FCA’s future work on climate change and green finance. These include 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.

The key points of the document include the consulting on new rules regarding climate-related disclosures and clarifying existing obligations. It also shows it will finalise rule changes requiring independent governance committees to oversee and report on firms’ environmental, social and governance and stewardship of policies.

Furthermore, the regulator will publish a statement in response to a joint discussion paper with the Financial Reporting Council on Stewardship outlining actions to address barriers to effective stewardship.

Finally, The FCA stated it will clarify expectations on consumers’ access to green financial products and services, and how firms can go about not misleading customers.

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 FCA will continue to contribute to several collaborative initiatives. This will include the Government-led cross-regulator taskforce on disclosures, and the Climate Financial Risk Forum, which it established alongside the Prudential Regulation Authority earlier in the year.

Earlier in the year, the UK’ government released its green finance strategy which is designed to improve responses to financial risks from climate change. In the eBook, it tells companies the roles the financial sector has in delivering global and domestic climate change and environmental objectives.


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