UK financial regulators required to consider climate change


The UK's principal financial regulators will be required to consider climate change, fully embedding green finance across the economy, the UK's Treasury announced last week.

The move means every financial decision will take climate change into consideration by including sustainability in the UK's main financial watchdogs' remit.

"Transitioning to an environmentally sustainable and resilient net-zero economy is a key pillar of the government's economic strategy to achieve strong, sustainable and balanced growth," the Treasury said in a statement.

The UK's Financial Conduct Authority and Prudential Regulation Committee, which supervise financial services firms, should now take into account the government's legally binding commitment to transition to a net-zero economy by 2050, following letters from UK finance minister Rishi Sunak updating their respective remits, it said.

"The letters set out the government's ambition to deliver a financial system which supports and enables a net-zero economy and mobilizes private sector finance behind sustainable and resilient growth," the Treasury said.

The updated remit letters also support the UK's plans to boost the competitiveness of its financial services sector by positioning it to seize the opportunities from the transition to net-zero, it said.

The move comes within weeks of an update to the remits for the Bank of England's Monetary Policy Committee and Financial Policy Committee in the UK's 2021 budget announced March 3, meaning all the UK's principal financial regulators will now have an explicit mandate to take climate change into account.

The Treasury's move also follows a £16 billion (€18.6bn) plan to decarbonize the North Sea oil and gas sector unveiled March 24. The transition plan aims to advance clean energy projects including hydrogen and carbon capture and storage projects and introduce climate criteria into the UK's oil and gas licensing system.