The Climate Change Act 2008 imposes a legally binding duty on the government to reduce the UK’s carbon emissions by 100 per cent by 2050, and many banks have pledged to do the same. The financial services sector, and banks in particular, can play a key role in achieving climate change goals. Through their own climate change policy and as a source of finance, banks have significant influence over the allocation of capital both towards and away from specific industries. Governments are seeking to harness this influence to accelerate the transition to a low-carbon economy.
The government believes that climate change disclosure can support investor decisions towards more environmentally sustainable investments as the UK moves towards a low-carbon economy. As the disclosure regime develops and it becomes easier to compare companies’ exposures to climate-related risks and opportunities, investors will be better equipped to incorporate these risks into their investment and business decisions.
In the UK there are several overlapping disclosure regimes for banks, including:
- Listing Rules.
- PRA expectations as set out in SS3/19.
- Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022.
This briefing will examine the obligations on UK banks as a result of these regimes and how such regimes interact with each other.
This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.
© Farrer & Co LLP, September 2022