Recommendation 7

HM Government Acknowledged

7. We congratulate the Bank of England on its laudable work highlighting the financial risks from climate change in recent years. The Bank of England has led the world in this regard, not least by becoming the first central bank to publish its own climate-related financial disclosure. The Bank is to be commended for its leadership on this. (Paragraph 79 of the EAC report) 8. The Government should clarify that the Bank’s monetary policy remit should include climate and nature objectives in the conduct of UK monetary policy, including when considering any extension of the Covid Corporate Financing Facility (CCFF) or future such mechanisms. We recommend that if any future support is offered via the CCFF, the Bank should require recipients to publish climate-related financial disclosures in line with the Government’s Green Finance Strategy as a minimum condition. (Paragraph 80 of the EAC report) At the Budget, the Chancellor updated the remit for the Bank of England’s Monetary Policy Committee (MPC). Subject to maintaining price stability, the MPC’s secondary objective is to support the economic policy of the Government. In the Budget the description of the Government’s economic policy was updated in the MPC remit to reflect the Government’s economic strategy for achieving strong, sustainable and balanced growth that is also environmentally sustainable and consistent with the transition to a net zero economy. On 9 November 2020, the Chancellor announced the UK’s intention to make Task Force on Climate-related Financial Disclosures (TCFD)-aligned disclosures mandatory in the UK across the economy by 2025, with a significant portion of mandatory requirements in place by 2023, along with publication of the Taskforce’s Interim Report outlining an indicative pathway to achieving that ambition. The Prudential Regulation Authority’s (PRA) 2019 Supervisory Statement set out the PRA’s expectation for firms to disclose in line with the TCFD framework.