All of the UK’s principal financial regulators must consider the impact of their decisions on climate change in an effort to help the UK reach its net zero carbon goal by 2050.
Chancellor Rishi Sunak (pictured) has written to the Prudential Regulation Committee (PRC) and Financial Conduct Authority (FCA) updating their remits to reflect the country’s net zero goals.
During his Budget speech at the beginning of March, Sunak updated the remits for the Bank of England’s monetary policy committee and financial policy committee to add a new rule that all decisions will consider the impact on climate change.
The regulatory updates come ahead of COP26 in November, where the UK is aiming to ensure every financial decision takes climate change into account.
“Building on their existing body of climate change-related work, the FCA and PRC, 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 a letter from the Chancellor updating their respective remits today,” said a Treasury spokesperson.
“The letters set out the government’s ambition to deliver a financial system which supports and enables a net zero economy, and mobilises private finance behind sustainable and resilient growth.”
As part of the national effort to combat climate change, the UK government is set to launch its first ever green bond later in the year.