Issue 1135 / 11 November 2021

Network for Greening the Financial System

Climate-related litigation against financial institutions - NGFS publishes technical document - 9 November 2021

The Network for Greening the Financial System (NGFS), a group of central banks and supervisors who share best practice on sustainable finance, has published a technical document (the document) entitled ‘Climate-related litigation: Raising awareness about a growing source of risk’.

The NGFS sets out general trends in climate-related litigation and proposes methods to address the risks. It includes a section on litigation risk as a sub-set of physical and transition risks and discusses the direct exposure of financial institutions to climate-related litigation.

The NGFS highlights the increase in climate-related litigation and the increasing practice of climate-related cases against financial institutions, including in relation to climate-related product disclosures, breach of contract in relation to such products and breach of directors’ fiduciary duties where they have taken decisions to finance greenhouse gas emitting projects.

The NGFS predicts that these changes will continue and emphasises the need for careful monitoring of climate-related financial risks by supervisors and central banks. This will ensure that financial and operational risks resulting from potential climate-related litigation are adequately managed.

Annex I of the document sets out a selection of climate-related litigation cases the NGFS considers particularly interesting and Annex III sets out the results of a survey conducted among NGFS members on climate-related litigation in their respective jurisdictions.

Climate-related litigation: Raising awareness about a growing source of risk

Financial Services Compensation Scheme

Annual levy - FSCS publishes update on 2021/22 levy and forecast on 2022/23 levy - 11 November 2021

The Financial Services Compensation Scheme (FSCS) has announced that the total levy for the 2021/22 financial year is now £717m, which is lower than the £833m levy announced at the last forecast in May 2021. The FSCS has also published its first levy forecast of 2022/23 of £900m, which includes an approximate amount for the FSCS’ running costs which will be consulted on in January 2022, and approximately £400m for compensation costs in relation to failures that have not yet occurred.

FSCS Outlook November 2021

Press release