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ARTICLE · 30 OCTOBER 2018

UK Prudential Regulator Consults On Managing Financial Risks From Climate Change

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On October 15, 2018, the U.K. PRA published a consultation paper on a draft Supervisory Statement on managing the financial risks from climate change.

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On October 15, 2018, the U.K. PRA published a consultation paper on a draft Supervisory Statement on managing the financial risks from climate change. The consultation follows the PRA's publication in September 2018 of its report "Transition in thinking: The impact of climate change on the U.K. banking sector." The consultation paper is relevant to banks, insurers, re-insurers, building societies and PRA- designated investment firms. The PRA wants firms to take a strategic approach to financial risks from climate change by taking into account current and credible risks and identifying actions needed now to mitigate existing and future risks.

The draft Supervisory Statement states that the PRA expects a firm's response to the financial risks from climate change to be proportionate to the nature, scale and complexity of its business. The draft Supervisory Statement sets out the PRA's expectations on how firms:

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