The developing regulatory approach to climate change

“Climate change is the single greatestthreat to a sustainable future,” said former United Nations secretary-generalBan Ki-moon. Banks and the largest insurers have already integratedclimate-related risks into their risk management frameworks; now, the assetmanagement sector must also prepare for enhanced regulatory obligations. Sushil Kuner outlines the key initiatives for financial services firms underway in the UK.

Sushil Kuner is a London-based principal associate who advises on all aspects offinancial services regulatory law at Gowling WLG. She has spent eight yearsworking within the Supervision and Enforcement Divisions of the FCA. ContactSushil on sushil.kuner@gowlingwlg.com.

The 2015 United Nations climate change summitin Paris (COP21) saw the first ever agreement under which virtually everycountry, including the United Kingdom, pledged to constrain their greenhousegas emissions, with the aim of keeping average temperature increases well below2˚C above pre-industrial levels. Globally, there has been anincreasing recognition by central banks and financial services regulators ofthe potential impact of climate change on financial services markets and theimportant role that financial services markets have in helping to combatclimate change.