New objectives and regulatory principles New regulatory principle that the regulators must have regard to the UK net zero emissions target and environmental targets
The government wants to further strengthen the UK’s regulatory regime relating to climate and the environment. Therefore, alongside the new secondary objectives, the government will embed consideration of the UK’s climate and environmental targets across the full breadth of the regulators’ general functions on a statutory basis.
	The government consulted on strengthening the UK’s regulatory regime relating to the climate target in its November 2021 consultation on the FRF Review and received significant support from respondents.
	The regulatory principles set out in FSMA 2000 aim to promote regulatory good practice across the range of the regulators’ policymaking. The November 2021 consultation proposed amending the regulators’ existing sustainable growth regulatory principle to incorporate the UK’s statutory climate target. Following feedback to the consultation, and given that the FCA and the PRA will have new secondary objectives to facilitate international competitiveness and growth in the medium to long-term, the Act removes the existing sustainable growth principle for the FCA and the PRA from the regulatory framework to avoid unnecessary duplication.
	The Act therefore introduces a new regulatory principle for the FCA and the PRA. The principle will require the regulators, when discharging their general functions to have regard to the need to contribute towards achieving compliance by the Secretary of State with section 1 of the Climate Change Act 2008 (UK net zero emissions target) and section 5 of the Environment Act 2021 (environmental targets), where each regulator considers the exercise of its functions to be relevant to the making of such a contribution. This regulatory principle seeks to cement the government’s long-term commitment to transform the economy in line with its target to reach net zero by 2050 , and to make progress towards the government’s long-term environmental goals, by ensuring the regulators must have regard to the government’s commitment to achieve these targets when discharging their functions.
	The PSR has a similar set of regulatory principles to the FCA and the PRA (including sustainable growth). As the PSR’s objectives are not changing, the PSR’s existing sustainable growth principle will be maintained, and the climate and environmental targets will be incorporated into its sustainable growth principle. This will be done in a way that ensures that the achievement of the net zero and environmental targets should be understood as being only one element of the sustainable growth principle.