By Matthew Scott, Julia van Huizen and Carsten Jung
- Climate change, and society’s responses to it, present financial risks which impact upon the Bank’s objectives. These risks arise through two primary channels: the physical effects of climate change and the impact of changes associated with the transition to a lower-carbon economy.
- The Bank’s response has two core elements. First, engaging with firms which face current climate-related risks, such as segments of the insurance industry. Second, enhancing the resilience of the UK financial system by supporting an orderly market transition.
- Forming a strategic response to the financial risks from climate change helps ensure the Bank can fulfil its mission to maintain monetary and financial stability, both now and for the long term.