PRA Biennial Exploratory Scenario — Climate Risk Results 2025
The PRA published findings from its second climate BES, covering physical and transition risk pathways across 19 major UK-regulated institutions. Early transition scenarios produce materially lower total losses than late or no-transition scenarios. Firms with concentrated carbon-intensive loan books face Pillar 2A capital discussions beginning in 2026.
Materiality
Horizon
Medium Term
Source Type
thematic review
Published
20 November 2025
AI Commentary
The Pillar 2A capital implication is the single most material output from this exercise. Firms in the bottom quartile on transition risk management should begin supervisor engagement immediately. The BES methodology is also used by the ECB, making scenario assumption alignment important for cross-jurisdiction groups.
Related Themes
1 theme