Under Mark Carney the Bank of England has been leading the way among financial services supervisors around the world on the issue of climate change. A series of initiatives are increasing pressure on banks, insurers and asset managers to assess the climate risks and opportunities that they face. 

The BoE has already proposed that boards of banks and insurers identify a senior executive to take charge of managing climate risks and report to the board — or face consequences. This latest announcement marks another escalation for banks. The approach throughout has been risk-based: the BoE is not prescribing what loans, policies or investments are "allowed", but instead is pressing the regulated sector to factor in the climate risk embedded in them.

We have examined the risks organisations face as a result of climate change, including those associated with transition risk of the sort highlighted by the BoE, in our latest report Climate change: A burning issue for businesses and boardrooms.