Climate change reporting obligations for UK banks

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.

Climate Change Reporting Obligations For UK Banks

If you require further information about anything covered in this briefing, please contact Grania Baird, Jessica Reed, Kya Fear, Fiona Lowrie, or your usual contact at the firm on +44 (0)20 3375 7000.

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