The United Kingdom is uniquely positioned to lead the global transition to a low-carbon economy, but the financial industry must act now to capitalize on the opportunity, according to the Financial Conduct Authority (FCA).

Speaking at the Climate Financial Risk Forum’s (CFRF) Symposium on October 23, 2025, FCA Chair Ashley Alder outlined a comprehensive vision for the UK to become the world’s sustainable finance center. Addressing an audience of regulators, scientists, and financial leaders, Alder argued that climate risk has firmly evolved from an environmental concern into a critical financial reality.

From "Tragedy" to Opportunity

Marking the decade since Mark Carney’s landmark "tragedy of the horizon" speech, Alder noted that the theoretical risks Carney warned of are now materializing in real-time.

"The risks are real, and they are growing," Alder stated. "From rising insurance costs due to extreme weather events, to shifts in asset valuations and lending criteria, the effects of climate change are now being felt in real time across the financial sector."

However, the FCA Chair emphasized that this disruption brings significant economic opportunity. He highlighted the work of actuaries developing "Planetary Solvency" frameworks, which assess nature's stability as a baseline for economic resilience.

New Regulatory Frameworks To support this transition, Alder announced several key regulatory moves designed to increase transparency and reduce liability risks for forward-thinking companies:

• Under the new Public Offers and Admissions to Trading Regime, companies will be able to publish transition plans and net-zero targets with greater legal protection. Liability will center on "recklessness or dishonesty" rather than simple negligence, encouraging bolder, more transparent disclosures.

• The FCA confirmed it will soon consult on adopting the International Sustainability Standards Board (ISSB) standards for listed companies, aiming to create a consistent "global baseline" for reporting.

• To combat market fragmentation and lack of transparency, ESG ratings providers will be brought within the FCA's regulatory perimeter.

The Global Race for Green Capital

Alder struck a competitive tone regarding the international landscape, noting that Asia is moving rapidly to capture the green finance market. He pointed to the London Stock Exchange’s listing of China’s first overseas Renminbi-denominated sovereign green bond earlier this year, and the fact that 2025’s largest global IPO was a Chinese EV battery manufacturer.

Despite this competition, Alder asserted that the UK’s existing infrastructure, home to the world's second-largest asset management center and a dominant insurance market, gives it a distinct advantage.

A Call to Action

Concluding his address, Alder called on the private sector to match the regulator's ambition. "We’re on the pitch – but we can’t play this game alone," he said, urging firms to bring forward challenges and ideas to help turn the UK’s potential into tangible impact.