Managing Climate Risk: The Role of Financial Regulators in the Net Zero Transition

Report and Policy Recommendation
Aldersgate Group | July 2023

Summary

This Aldersgate Group report with CUSP calls on the UK Government to provide a strong legal basis for financial regulators to support the transition to a net zero and nature positive economy. It finds that financial regulators are limited by a narrow mandate on climate, capacity and resource constraints, and a lack of comprehensive net zero-aligned policy across the economy.

The report recommends that government sets out a strategic and sequenced approach to financial regulators to ensure they support the implementation of the net zero transition at pace. This includes empowering them with a stronger and clearer mandate on net zero and nature, and with this mandate, the use of green prudential tools to accelerate decarbonisation and address systemic climate risk.

Further Reading