DP23/1: Finance for positive sustainable change

Read DP23/1

We are committed to supporting the role of the financial sector in enabling an economy‑wide transition to net zero, and to a sustainable future more broadly. To help the financial industry deliver against its potential to drive positive sustainable change, we published DP23/1 to encourage an industry-wide dialogue on firms’ sustainability-related governance, incentives, and competence. 

This is a fast-moving and evolving field where there are many initiatives taking place. We wanted to help narrow this field and highlight good, evolving practices while considering whether there is a case for further regulatory measures in this area. 

To encourage diversity of thought and wide-ranging debate, this Discussion Paper also included commissioned articles from experts with relevant and interesting perspectives on firms’ sustainability-related governance, incentives, competence and stewardship arrangements. We are grateful to the authors for their views and contributions. 

Feedback we received

The responses we received were generally positive about the importance of sustainability matters and the role of the themes outlined in DP23/1.  

Our response  

We welcome the level of engagement from respondents and the importance with which respondents generally regarded the themes and issues in DP23/1. The insights we gained from the responses and in our dialogue with stakeholders have been very important in building our understanding of the state of play, including challenges and opportunities.

Since we published DP23/1, we have introduced rules relating to some of the themes. For example:

• The Consumer Duty came into force on 31 July 2023.  
• We published our SDR and labelling rules on 28 November 2023.  
• The Anti-Greenwashing Rule came into effect on 31 May 2024.

It is encouraging that many respondents to DP23/1 acknowledged the importance of these measures.

We recognise the importance of allowing time for new measures to be implemented before introducing further rules in these areas. And for the DP’s themes not captured by these measures, we recognise that current practices are still developing. Indeed, for some, we continue to oversee forums that bring industry representatives together to enable market-led solutions and guidance, such as the Climate Financial Risk Forum (CFRF) and the Adviser’s Sustainability Group (ASG).  

Next steps

We are not currently considering introducing new rules on the themes discussed in DP23/1. But the DP’s themes remain important to firms’ success in:

• Embedding sustainability considerations.
• Delivering value to consumers.
• Supporting market integrity.  

We will continue to monitor developments in the market to make sure it is functioning well.

In keeping with our regulatory objectives, we will continue to focus on areas where potential harm to consumers, market integrity or competition is greatest, and where we think regulatory action can make a positive difference.

We will continue to promote the themes discussed in DP23/1 through other initiatives, both domestically and internationally. We will continue to:

• Carry out supervisory engagement.
• Bring market participants together to develop market-led solutions.
• Influence on the global stage.  

Through these actions, we aim to help the sustainable finance market to grow responsibly and continue to promote the UK as a leading financial centre.