Financial Conduct Authority response on managing climate risk
20 July 2018
The Environmental Audit Committee's recent report on ‘Greening Finance: embedding sustainability in financial decision making' included several recommendations for the Financial Conduct Authority and the Committee is today publishing the regulator's response.
- Letter from the Financial Conduct Authority
- Greening Finance: embedding sustainability in financial decision making
- Environmental Audit Committee
Mary Creagh MP, Chair of the Environmental Audit Committee, said:
“Climate change poses growing financial risks to a range of investments – from food and farming to energy and infrastructure. The low-carbon transition also presents exciting opportunities for British businesses in clean energy, transport and tech.
“We are pleased that the FCA is acting on one of our recommendations and is consulting on rule changes that would require the Independent Governance Committees of contract-based pensions to report on how they manage environmental risks and how they take account of members' ethical concerns.
“The FCA has not committed to change its Listing Rules to specifically require climate-related financial disclosures when companies offer stock on the London Stock Exchange through Initial Public Offerings (IPO). However, the regulator has said that it will now highlight to issuers the need to make adequate disclosures regarding materially important information, such as how environmental risks affect the valuation of a listed company's securities and how these matters are managed by the company.”