The Climate Financial Risk Forum (CFRF) has published a guidance to financial firms on an approach to address climate-related financial risks. The guide, the first of its kind, provides practical recommendations to firms of all sizes on disclosure of climate-related financial risks; effective risk management; scenario analysis, and opportunities for innovation in the interest of consumers.

The CFRF was jointly established in March 2019 by the Prudential Regulation Authority (PRA, and pictured) and the Financial Conduct Authority (FCA), with the aim of building capacity and sharing best practice across financial regulators and industry to advance the sector’s responses to the financial risks from climate change.

The objective of the guide is to help firms understand the risks that arise from climate change, and to provide support on how to integrate these risks into their strategy and decision-making processes.

Sheldon Mills, the FCA co-chair of the CFRF and interim executive director of strategy and competition, said: 'Climate change represents an unprecedented challenge to the planet, and the financial services industry has a significant role to play if we are to meet the UK’s target of net-zero by 2050. The CFRF is a positive example of collaboration between regulators and industry to find common ways to overcome barriers to meeting this challenge. The Guide will be a helpful tool for firms in seeking to address the risks and potential opportunities presented by the transition to net-zero. We will continue to work through the forum to build upon this progress.'

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