The UK government has explicitly embedded consideration of the transition to a net-zero economy into the remits of all major financial regulators in the country.
The Chancellor of the Exchequer Rishi Sunak sent letters to the heads of the Financial Conduct Authority (FCA) and the Bank of England (BoE)'s Prudential Regulatory Committee (PRC) – which outlines the work for the Prudential Regulatory Authority (PRA) – to update their mandate to "have regard to the government's commitment to achieve a net-zero economy by 2050" when "considering how to advance its objectives and discharge its functions".
The letters come just weeks after the government updated the remit of the BoE Monetary Policy Committee (MPC) and Financial Policy Committee (FPC). The government said the FCA and PRC updates now means all the major financial regulators in the country have been explicitly asked to consider climate change in their work.
Since the government started to update the BoE mandates, the central bank has already announced it is working on plans to account for climate in its £20 billion ($28 billion) corporate bond buying programme and was considering how to develop a 'climate friendly' market neutrality principles and collateral regime for financial institutions.
