FCA publishes DP on climate change and green finance

Climate change is thought to have a significant impact on the UK’s financial services market and has led the FCA to publish its Discussion Paper on climate change and green finance (DP18/8).

In its DP, the FCA recognises that the risks from climate change will affect the risks and value to some investments, noting that “asset managers are increasingly being given mandates that refer to climate change”. According to the FCA, this is an indication that “readily available, reliable and consistent disclosures about climate change issues would help ensure those making investment decisions had accurate information to help them.”

The FCA says it has been working closely with regulators in the UK and overseas, the Government, industry and experts in the sustainable finance field to understand specific issues in this area and understand how it may intervene.

The DP sets out:

  1. How the different impacts of climate change could impact the FCA’s long and short term objectives;
  2. Some of the opportunities and risks the transition to a low carbon economy presents in the UK financial services markets; and
  3. The specific action FCA will take in the near term to ensure that markets function well and deliver good outcomes for consumers.

Comments on the DP are welcomed by the FCA until 31 January 2019.