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Joint statement by the FCA, PRA, TPR and FRC on the publication of Climate Change Adaptation Reports 

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  • PRA Image

01 Nov 2021

The Financial Conduct Authority (FCA), Prudential Regulation Authority (PRA), The Pensions Regulator (TPR) and the Financial Reporting Council (FRC) have issued a joint statement on the publication of their Climate Change Adaptation Reports.

Following the Government’s invitation under the Climate Change Act 2008 to publish Climate Change Adaptation Reports, their reports set out how climate change affects the UK financial regulators' respective responsibilities and the actions they, and the financial sector, are taking in response to it.

The focus of the UK financial regulators is on ensuring that the risks from climate change and the opportunities from the transition to a net-zero economy are being identified and proactively managed across the financial sector. 

The FCA's report sets out the steps that the industry has taken to mitigate the risks climate change presents and areas where more needs to be done are identified, such as retail investments and mortgages. Additionally, the report examines how the industry is making commitments to reach net-zero. 

The PRA's report sets out the risks from climate change to its objectives and the PRA's response to them.  This includes how climate-related financial risks affect the firms the PRA regulates, its work to support and drive improvements in firms’ capabilities to manage climate-related risks effectively, and its consideration of what further policy action may be necessary.  The report also examines the relationship between climate change and the banking and insurance regulatory capital regimes, whether there are gaps that should be addressed and the PRA’s planned future work in this space. 

The Pension Regulator's report sets out the risks from climate change that are most relevant to occupational pensions schemes and the approaches TPR are taking to tackle them both as a regulator and an organisation.

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