UK Regulator Opens Consultation On Climate Risk Rules For Banks & Insurers

The UK’s Prudential Regulation Authority (PRA), part of the Bank of England, has released a consultation paper outlining clearer expectations for how banks and insurers should identify, manage, and govern climate-related risks.

The regulator supervises around 1,500 financial institutions and said firms had requested more clarity on its climate risk expectations. While some firms have taken steps, the PRA noted that progress remains inconsistent. The proposals emphasise the use of scenario analysis and require firms to use insights from such models in business decisions. The PRA plans to work with industry groups to refine best practices. Executive Director David Bailey said stronger risk management will support financial system resilience.