The Bank of England has told financial institutions that they must have a “credible plan” to cope with the potential costs arising from climate change. The Bank’s Prudential Regulation Authority said that banks and insurers should show how they will deal with any fallout. The PRA said that regulated firms would have to start including a list of their most significant exposures to climate-related risks in their reports to the authorities, as well as carrying out internal stress tests to identify problems, including detailed catastrophe modelling. The Bank has been increasing pressure on the City to prepare for climate change and Mark Carney, the governor, has given several speeches.
Times 16th Oct 2018 read more »
The Bank of England has stopped short of forcing financial companies to disclose the potential risks they face from climate change, despite growing calls from campaigners for such action. In a warning to finance firms to vastly improve their planning to safeguard against the financial risks posed by global warming, Threadneedle Street asked companies to “consider the relevance” of disclosing their climate-related risks. The central bank’s prudential regulation authority (PRA), which is tasked with ensuring UK financial sector stability, launched the guidelines for consultation on Monday, in a package of measures designed to coax banks to prepare for the low-carbon economy of the future.
The Bank has previously said that only 10% of banks take a long-term view of the risks posed by climate change, while Mark Carney, its governor, has said that failure to adapt would have a “catastrophic impact” on the financial system.
Guardian 15th Oct 2018 read more »