The FCA’s Feedback Statement to DP18/8 on Climate Change and Green Finance has made it clear that the regulator plans to come down hard on ‘greenwashing’ and will take action to prevent consumers being misled. The statement maps out the regulator’s plans for the next few years on climate risk and green finance and puts boards on notice that they need to take immediate action to mitigate and quantify climate risk.
In the future, firms should expect significant regulatory changes in relation to oversight, systems and controls. Taken together with the PRA’s work on identification of senior managers responsible for climate change, it is clear that UK regulators are building a comprehensive regulatory regime to green the financial system.
This builds on similar initiatives at the global level, the UNEP Finance Initiative, and at the European level, the Sustainable Finance Action Plan. These will also have a direct impact on UK financial institutions.
We are delighted to have the following representatives of the key regulatory bodies speaking at The Climate Risk and Green Finance Regulatory Forum, which is being held in London on 19th November:
- Richard Monks, Director of Strategy Division, Financial Conduct Authority
- Theresa Löber, Head of Climate Hub, Bank of England
- Olivier Guersent, Director-General, Financial Stability, Financial Services and Capital Markets Union Directorate, European Commission
- Eric Usher, Head of the UNEP Finance Initiative
- Soledad Núñez, Board Member, Banco de España
Financial institutions need to understand the regulatory framework that is beginning to emerge for greening the financial system. It is very clear that green finance is fast becoming one of the most important issues for financial institutions and that adapting business models to embrace it will not just be a source of competitive advantage, but a regulatory necessity.
The programme focuses on the practical steps that financial institutions need to be taking now in order to ensure that they are prepared and fully compliant for the emerging regulatory environment, as well as examining the new opportunities that this seismic shift in finance will offer.
Topics that will be covered include:
- Making green finance markets work to the benefit of the consumer
- The European Commission’s approach to greening the financial system via regulation
- Impact of the greening of the FS system on governance, the role of the board and senior management responsibility
- Towards best practice in disclosure and reporting
- Climate change risk management and operational resilience
- Best practice in scenario analysis
- Sharing best practice on greening the financial system across borders
- Catalysing the growth of the green bond market – taxonomy, a green bond standard, data availability and verification, and methodologies for low carbon indices
- Financing the transition to low carbon infrastructure – the role of public-private partnerships
- Mobilising mainstream finance – the potential for sustainable investments and ESG
Having committed itself to net zero emissions of greenhouse gases by 2050 in June, the UK Government published its Green Finance Strategy the following month. This document sets out a detailed plan for greening finance, financing clean growth and seizing the opportunity to establish the UK as a global leader in green finance. It is very clear that green finance is fast becoming one of the most important themes for financial institutions and that adapting business models to embrace it will not just be a source of competitive advantage, but a regulatory necessity.
Clearly, financial institutions need to prepare themselves rapidly for significant change and the new opportunities it will bring in. Attendance at this forum will be invaluable in this context.