Photo by Diego Delso
Key Points
- Companies developing climate solutions may struggle to attract private capital, a paper from the Financial Conduct Authority finds.
- Technologies often struggle to become commercially viable without coordinated policy and risk-sharing models.
- The regulator plans to share its findings with stakeholders to help shape policy and market coordination.
Companies and projects developing climate solutions may struggle to reach the commercial maturity needed to attract private capital, according to a paper from UK regulators.
The paper was published by the Financial Conduct Authority (FCA), supported by the Prudential Regulation Authority (PRA) and the Green Finance Institute (GFI), following contact with more than 45 market participants, including capital providers and climate solutions companies and start-ups.
“Climate risk represents a source of growing financial risk and is already shaping investment decisions, asset values, and market outcomes. Scaling finance for climate solutions is therefore not only a climate imperative, but an economic and strategic one,” said Alicia Kedzierski, head of the FCA’s sustainable finance department. “The UK does not lack initiatives, but it does need more coordinated action to unlock their full impact.”
The report finds proven technologies struggle to become commercially investable projects without coordinated policy and risk-sharing measures.
“Capital is not always well-matched to opportunity, despite strong appetite,” the paper says. “While the UK financial system has depth and diversity of capital, this capital is not always well aligned with the scale, tenor, or risk-return profile of climate solutions opportunities.”
The paper also highlights that information and capacity gaps across policy, finance, and industry can increase costs and reduce confidence, especially for small and medium-sized enterprises.
“Many of the barriers identified can be overcome through coordinated action. A range of initiatives are already underway to improve policy clarity, strengthen the public finance landscape, mobilise long-term capital, and improve information flows,” the paper concludes.
The FCA said it is sharing the findings with UK and international stakeholders to inform policy development and market coordination and it will continue to advance sustainable finance, including supporting the development of industry-led transition metrics through the Climate Financial Risk Forum, an industry initiative created by the FCA and PRA to help the financial sector manage climate-related risks.
This page was last updated June 5, 2026
Written by
Emma Thomasson is a British journalist, consultant and trainer based in Berlin. She is an expert in economics, politics, business and technology. She previously worked for Reuters as a correspondent and bureau chief in Germany, Switzerland, the Netherlands, South Africa and the UK.
