As part of its programme of work on sustainable, responsible, and social impact (SRI) finance, the Financial Inclusion Centre (FIC) has begun a new project called The Devil is in the policy detail – will financial regulation align financial market behaviours with climate goals?
The new project follows on from Time for Action – greening the financial system. Time for Action was a systems analysis of the barriers inhibiting the financing of sustainable, responsible, and social impact (SRI) activities; and made over 40 policy recommendations to ‘green the financial system’ and increase the level of SRI financing.
But, FIC believes that not enough attention has been paid to the detail of the key policies proposed by the main regulatory authorities to align the behaviours of financial institutions with climate goals.
Therefore, The Devil in is the policy detail intends to evaluate in more detail the main policy and regulatory tools. We are very grateful to Friends Provident Foundation for also supporting this follow up project.
The project spans both prudential and conduct regulation directly aimed at financial institutions such as banks, insurers and asset managers, and new disclosure requirements placed on businesses in the real economy.
The project will look at three main categories of policy and regulatory tools:
- Prudential regulation: the balance sheet/ risk management policy tools that the Bank of England (BoE) and Prudential Regulation Authority (PRA) intends to use to align behaviours of banks and insurers with climate goals.
- Conduct of business/ financial reporting/ disclosure: the policy tools that the Financial Conduct Authority (FCA), Financial Reporting Council (FRC), and The Pensions Regulator (TPR) intends to use to improve disclosure and reporting on climate performance.
- EU/ global standards: what is the likely direction for UK policy post Brexit, and how does UK policy standards compare with proposed EU/ global standards?
To accompany the work, we are publishing a series of podcasts focusing on a specific project theme. The audience for the report and podcasts will be a wide range of stakeholders including civil society organisations, policymakers and regulators, and the financial services sector.
The first podcast sets the scene for regulatory reform. Podcast: The Devil is in the policy detail setting the scene
The second podcast covers the role of ‘conduct’ regulation and the role of the Financial Conduct Authority (FCA), and The Pensions Regulator (TPR). Podcast: The Devil is in the policy detail – the role of conduct regulation
The third podcast covers the role of Parliament, government, The Bank of England, and Prudential Regulation Authority. Podcast: The Devil is in the policy detail – the role of Parliament, government, The Bank of England, and Prudential Regulation Authority (PRA)
The fourth podcast covers disclosure and reporting, the role of international and national standards setting bodies, and the audit and accountacy professions: Podcast: The Devil is in the policy detail – the role of disclosure and reporting, standards setting bodies, and audit and accountancy professions
We wanted to bring in some outside voices and to understand some of the practical challenges facing investors, pension scheme members, advisers, fund managers and data providers. So, in this podcast, we look at the role of intermediaries in the broad sense of the word. Podcast: The Devil is in the policy detail-the role of intermediaries in greening the financial system
In the latest podcast we cover the critical role data and data assurance will play in making climate related financial regulation effective and aligning financial market behaviours with climate goals. Podcast: The Devil is in the policy detail-the role of data and data assurance in greening the financial system
We hope the podcasts are informative and interesting. If you have any questions or would like further information on the project, please contact Mick McAteer on email@example.com or firstname.lastname@example.org