The move raises global ambition 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 Financial Conduct Authority (FCA) and Prudential Regulation Committee (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.
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.
This follows the publication of the updated remits for the Bank of England’s Monetary Policy Committee (MPC) and Financial Policy Committee (FPC) at Budget 2021, which also reflect the importance of environmental sustainability and the transition towards net zero.
Transitioning to an environmentally sustainable and resilient net zero economy is a key pillar of the government’s economic strategy to achieve strong, sustainable and balanced growth.
The updated remit letters also support the UK’s plans to boost the competitiveness of its financial services sector by positioning it to seize the opportunities from the transition to net zero.