Question to the HM Treasury:

To ask the Chancellor of the Exchequer, with reference to the Answer of 16 October 2025 to Question 79904 on Carbon Emissions, if she will make it her policy to require the Bank of England to undertake a nature stress test.

The Chancellor’s 2024 remit and recommendations letter to the Bank of England’s Financial Policy Committee (FPC) sets out that the Committee should “consider how climate-related risks could impact financial stability over the near and long term, including, where appropriate, through its stress testing frameworks, ensuring that risks stemming from possible and severe global climate scenarios are reflected in its analysis on climate risks, and that sufficient time horizons are considered”.

The remit letter also sets out that the Committee should “continue to consider the materiality of nature-related financial risks for its primary objective”.

The Chancellor and the Governor of the Bank of England meet regularly to discuss the financial stability outlook. However, the FPC and the UK’s financial regulators are operationally independent from government in terms of how they carry out their specific responsibilities. This model is important for maintaining public trust and ensuring that our expert regulators are able to act flexibly to address evolving risks.