On 21 May 2026, the Financial Conduct Authority (FCA) published its findings from its Transition Finance Pilot (the Pilot) which examined barriers to scaling finance for climate solutions.

Background

Announced as part of the Financial Services Growth and Competitiveness Strategy in July 2025, the Pilot was a market engagement exercise led by the FCA and supported by the Prudential Regulation Authority and the Green Finance Institute. Its findings are based on a literature review and bilateral engagement with a wide range of stakeholders, including finance providers and climate solutions developers.

Through the Pilot the FCA sought to develop a clearer understanding of how effectively the UK financial system supports climate solutions projects and companies, identifying any practical actions that could support the market to work more effectively. This focus emerged in response to market feedback that there may be particular barriers hindering the flow of capital to this sector.

Findings

Three main findings have been identified:

  • Some climate solutions struggle to reach a commercial maturity sufficient to attract private capital. Many climate solutions face challenges moving from technical readiness to market readiness, meaning proven technologies do not always translate into commercially investable projects without coordinated policy and risk-sharing measures.
  • Capital is not always well-matched to opportunity, despite strong appetite.While the UK financial system has depth and diversity of capital, this capital is not always well aligned with the scale, tenor, or risk-return profile of climate solutions opportunities.
  • Information and capacity gaps create frictions across the market. Information asymmetries and capacity gaps across policy, finance, and industry create frictions that increase costs and reduce confidence, especially for small and medium-sized enterprises (SMEs).

Next steps

The FCA is sharing its findings with UK and international stakeholders to inform policy development and market coordination. It is also exploring how its regulatory framework can better support SME access to finance.