In early 2023, the FCA released a discussion paper seeking to encourage industry-wide dialogue on financial services firms' sustainability-related governance, incentives, and competence. This was part of the FCA's broad commitment to supporting the role of the financial sector in enabling an economy‑wide transition to net-zero, and to a sustainable future more broadly.
In the discussion paper, the FCA mooted a number of potential new rules in this area, including proposing a requirement to have a board-level "sustainability champion". While the industry broadly seems to have supported the aims of what the FCA was trying to achieve, the feedback was that it would not be appropriate to have additional mandatory rules to underpin matters that will vary from firm-to-firm.
Accordingly - and perhaps also in light of (1) the more general trend moving away from ESG rules, and (2) the FCA's desire to reduce the regulatory burden on firms rather than impose new rules - the FCA has now confirmed that it will not be creating new rules in this space.
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