Financial Services Bill — Report (1st Day) — Amendment 3 — 24 Mar 2021 at 18:15

Moved by Lord Oates

3: After Clause 5, insert the following new Clause-“Review of capital adequacy requirements risk weights(1) Within six months of the day on which this Act is passed the Prudential Regulation Authority must complete a review of the risk weighting applied to investments in-(a) existing fossil fuel exploitation and production, and(b) new fossil fuel exploration, exploitation and production.(2) In conducting this review, the Prudential Regulation Authority must have regard to-(a) the need to prevent the misallocation of investment to global warming accelerating activities as a result of artificially low risk weights; (b) the full implications of climate change for the risk of investments including physical climate risks, transitional climate risks and climate liability risks;(c) the likelihood of assets becoming wholly or partially stranded before the end of their normal exploitation cycle;(d) the impact of global warming accelerating activities on financial stability, in particular as a result of climate change related disruption of the economy; and(e) the advice of the Climate Change Committee.(3) The Treasury must lay before Parliament the outcome of this review within one month of the completion of the review.”Member’s explanatory statementThe purpose of this amendment is to place a requirement on the PRA to review the adequacy of risk weights applied to fossil fuel exposures in capital requirements having regard to the implications of climate change.

Ayes 276, Noes 276.

Debate in Parliament |