On 28 October 2021, the Financial Conduct Authority (FCA), Prudential Regulation Authority (PRA), The Pensions Regulator (TPR) and the Financial Reporting Council on (FRC) released a joint statement concerning the publication of Climate Change Adaptation Reports. Each report sets out how climate change affects the UK financials regulators responsibilities and the actions that they are taking in response to it.

The FCA’s report outlines:

• its ESG strategy and how it is evolving;
• a timeline of ESG publications;
• climate-related risks which include insurance underwriting risk, credit risk, financial market risk and operational risk;
• how firms and listed companies are planning to transition to net zero; and
• the role of capital mobilisation in financing both climate change adaptation and climate change mitigation.

The PRA’s report sets out its report in two parts.

Part A of the report examines:

• the risks posed by climate change to PRA regulated firms;
• the progress they have made in their management of these risks;
• what the PRA’s response to these risks has been; and
• the PRA’s supervisory strategy from 2022.

Part B of the report examines:

• the relationship between climate change and the banking and insurance regulatory capital regimes;
• whether there are gaps that should be addressed; and
• the PRA’s planned future work in this space.

The FRC will publish its report later this year.