Prudential Regulation Authority

... um, and we've, um, talked to the government about this and, and political part- other political parties.

One of the, uh, for the, um, Prudential Regulatory Authority and the Financial Conduct Authority in the UK, uh, they have objectives which are trade-off objectives.

So yes, they've got to, you know, make sure that there are good consumer outcomes that, um, you know, they, they've got an appropriate regul- regulatory framework.

And the trade-off they have to make is that, um, whenever they're thinking about regulation, it has to be, they, they have to main, uh, maintain a focus on, um, the UK's international competitiveness.

These two words have gone from the back pages of annual reports to the front of board agendas in the space of just a few years.

But what does climate risk actually mean for banks, for insurers, and for the businesses that depend on them? And what happens when the land itself starts to fail? A new framework, SS525, which was first published by the UK Prudential Regulation Authority, or PRA, in December 2025, aims to help the financial sector better capture and quantify these risks.

First up, Weightmans breaks down what makes the framework different from past guidance and the importance of nailing down a climate risk strategy.

The organizations that adopt most successfully will be those where sustainability, finance, and risk teams work together to build a consistent narrative about long-term business resilience.

So I guess just for my benefit and the benefit of our audience, it'd be good to get a brief on what SS five twenty-five really is and who it will be impacting.

Yeah, sure.

SS five twenty-five is the second supervisory statement that the Prudential Regulation Authority, which is one of the regulators for the financial services sector, and particularly banks and insurers, has set out for those firms to take into account climate-related risk as part of the regulatory agenda.

And you asked, who does it impact? The primary target is, uh, lenders, so banks and building societies, and also insurers.

different organizations and different people within different organizations and tried to see how things have matured.

Because while we are a mature company that's done risk and business continuity, I would say we've actually in the last few years been disruptive in the fact that we've realized that keeping those disciplines a little siloed because we did disaster recovery or we do business continuity or we do risk or crisis management we're all in on resilience and what the what the report has told us is that there's still a Some firms that are doing things from a regulatory standpoint, particularly outside North America, there's acts like the DORA, the Digital Operational Resilience Act, there's the regulators, the Prudential Regulatory Authority that really look at insurance.

We don't have that in the US at the moment.

We actually have some forms of regulation, but it's not as prescriptive.

So the business will continue in your example of a call center, What would our work transfer capabilities be? What would our capacity planning be? Those types of things.

What we didn't have, and the banking industry led it, and the report leads to this as well, framing resilience.

The concept was brought by the UK regulators, the Bank of England, the Financial Conduct Authority, and the Prudential Regulatory Authority, very much about the consumer saying, This is great, guys.

You've got all of this information.

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