FCA published feedback statement (FS19/6) on its October 2018 discussion paper (DP18/8) on climate change and green finance. Through the discussion paper, FCA sought views on the potential FCA action on climate change and green finance, in line with its strategic objective of ensuring that relevant financial markets function well. The statement identifies a number of priorities that will provide a foundation for the future work of FCA in this area. These priorities 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.
The feedback statement applies to policy makers and regulatory bodies, regulated firms, issuers, investors, and advisers to issuers and investors, industry groups/trade bodies, industry experts and commentators, consumer groups and individual consumers, charities, and academics and think tanks. The statement sets out the key actions FCA will take:
- Consult in 2020 on new rules to improve climate-related disclosures by certain firms and clarify existing obligations
- Finalize rule changes requiring Independent Governance Committees to oversee and report on firms’ environmental, social, and governance (ESG) and stewardship policies
- Publish a feedback statement in response to a joint Discussion paper with the Financial Reporting Council on Stewardship, setting out actions to address the most significant barriers to effective stewardship
- Clarify expectations about consumer access to green financial products and services and take appropriate action to prevent consumers from being misled
- Continue to contribute to several collaborative initiatives, including the Government-led cross-regulator taskforce on disclosures and the Climate Financial Risk Forum (CFRF), which was established with PRA earlier this year.
FCA had received 73 responses to the discussion paper from a range of stakeholders, including regulated firms, trade bodies, and think tanks. The feedback has been summarized under five key themes: climate-related disclosures by securities issuers; climate-related disclosures by regulated firms; common metrics and standards on sustainability; stakeholder concerns, commercial priorities, and barriers to growth; and industry engagement.
Keywords: Europe, UK, Banking, Insurance, Securities, Climate Change, Green Finance, Climate-Related Disclosures, FCA
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