Regulatory AlertsFS19/6: Climate change and green finance
The UK Financial Conduct Authority issued this feedback statement to outline actions and next steps following stakeholder responses to its October 2018 discussion paper on climate change and green finance. The regulator commits to consulting on new rules for climate-related disclosures, finalizing requirements for Independent Governance Committees to oversee ESG policies, and challenging firms for potential greenwashing. Additionally, the FCA will address stewardship barriers and contribute to collaborative initiatives including the Climate Financial Risk Forum and the European Commission’s Sustainable Finance Action Plan.
This Feedback Statement summarises the responses we received from stakeholders to our Discussion Paper (18/8) on Climate Change and Green Finance that we published in October 2018, and sets out our actions and next steps.
Show FS19/6 (PDF)
Why we are publishing this Feedback Statement
Climate change is having a significant and wide-ranging impact on the UK economy and on financial services markets. We have an important role in enabling firms to manage the risks from moving to a low carbon economy, supporting the development of the green finance market and ensuring consumers are appropriately protected. This Feedback Statement sets out the actions we are taking to do this.
Who this applies to
This Feedback Statement applies to the following:
consumer groups and individual consumers
charities
industry groups / trade bodies
regulated firms
issuers, investors, and advisors to issuers and investors
policy-makers and regulatory bodies
industry experts and commentators
academics and think tanks
Next steps
Our key actions and next steps include:
consulting on new rules to improve climate-related disclosures by certain issuers 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
challenging firms where we see potential greenwashing, clarifying our expectations and taking appropriate action to prevent consumers being misled
contributing to several important collaborative initiatives, including the Climate Financial Risk Forum (CFRF), the Fair and Effective Markets Review (FEMR) working group, the Government-led cross-regulator taskforce on disclosures and the European Commission’s Sustainable Finance Action Plan (SFAP)
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