It has identified a number of priorities which will set out the regulator’s future work on green finance.
Among these, the FCA will request issuers to implement climate change disclosures, integration of climate change risk and implementation opportunities into regulated firms’ decision-making processes, as well as greater access to green products for customers.
In the feedback statement to a discussion paper on green finance, the watchdog set out key actions, 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, and;
- Clarifying its expectations around consumers’ access to green financial products and services and taking appropriate action to prevent consumers being misled.
Additionally, the FCA will contribute to the Climate Financial Risk Forum, a government-led cross-regulator taskforce, established with the Prudential Regulation Authority (PRA) in early 2019.
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.”