The UK’s Financial Conduct Authority (FCA) is seeking feedback on introducing regulatory expectations or guidance on senior management responsibilities for regulated firms’ sustainability-related strategies, including the delivery of climate transition plans.
It forms part of a wide-ranging new discussion paper from the FCA on sustainability-related governance, incentives, and competencies.
It is seeking views on whether to set regulatory expectation or guidance on how firms’ culture and behaviours can support positive sustainable change and also on boards having the right skills and knowledge.
The FCA also asks whether it should set regulatory expectation or guidance on how senior management monitor and oversee climate- and sustainability-related developments and the governance and oversight of sustainable products.
Other areas where the FCA is considering regulatory expectations or guidance are the design of remuneration and incentive plans linked to sustainability-related objectives and encouraging effective stewardship.
The comment period ends 10 May.
“We want to see where the market is moving and highlight better practices to help and guide the industry. What gets measured and incentivised gets done,” said Sacha Sadan, the FCA’s ESG Director, in an accompanying blog.
“We want to see active investor stewardship that supports a market-led transition to a more sustainable future.”
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