The Financial Conduct Authority and the Prudential Regulation Authority have published press releases following the first meeting of the Climate Financial Risk Forum on March 8, 2019. The CFRF is a joint forum established by the PRA and FCA in late 2018. The CFRF aims to encourage financial sector approaches towards managing the financial risks from climate change as well as supporting green finance. The CFRF will develop practical tools and approaches to reduce the barriers for firms looking to adopt a strategy for minimizing financial risks from climate change. The regulators are concerned with both the impact of climate change itself and the transition to supporting a low carbon economy. Both the FCA and the PRA consulted in late 2018 on the impact of climate change. The PRA consulted on a draft Supervisory Statement on managing the financial risks from climate change and the FCA consulted on climate change and green finance and the potential changes to its regulatory approach to these issues. The FCA consultation set out specific actions that the FCA intends to take in the short term in four areas - capital markets disclosures, public reporting requirements, green finance and pensions.
The membership of the forum is representative of the size, business model and approach to climate change of firms across the financial sector. The forum members include banks, insurers and asset managers as well as technical experts and other stakeholders, such as trade bodies.
At this first meeting, the CFRF decided to establish four working groups, which will focus on risk management, scenario analysis, disclosure and innovation. The long-term aim of the working groups is to produce practical guidance to share with the industry.
View the press release.
View details of the PRA's consultation.
View details of the FCA's consultation.