Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will make an assessment of the potential merits of placing statutory duties on the (a) Financial Conduct Authority and (b) Prudential Regulation Authority to help meet the UK's climate targets.

The financial regulators’ primary focus must be to ensure the safety, soundness and integrity of the markets they regulate. While the government expects that the regulators will play a crucial role in supporting the achievement of the government’s net zero target, it is not their primary responsibility given many of the levers for change sit outside of financial services regulation.

However, the Financial Services and Markets Act 2023 introduced a new regulatory principle for the Financial Conduct Authority, Bank of England and Payment Systems Regulator to consider in their work. To further strengthen the UK’s regulatory regime relating to climate and the environment, the government has embedded the consideration of the UK’s climate and environmental targets across the full breadth of the regulators’ general functions on a statutory basis.

This regulatory principle seeks to cement the government’s long-term commitment to transform the economy in line with its target to reach net zero by 2050, and to make progress towards the government’s long-term environmental goals, by ensuring the regulators must have regard to the government’s commitment to achieve these targets when discharging their functions.

This principle does not create any specific requirements on firms. Rather, they are expected to inform the future work of the regulators.