The Bank of England has published its second Climate Transition Plan 2026 update alongside its 2026 climate-related financial disclosure, setting out how the central bank intends to meet its net-zero operational target and how it is embedding climate risk across its balance sheet. The two documents together provide the Bank's annual account of how it is managing climate-related risks and opportunities.
The disclosure covers the Bank's own operations, its financial exposures and the portfolios held for monetary policy purposes, offering a comprehensive picture of how climate considerations feed into decisions and risk management across the institution. The publication reflects the Bank's continuing effort to lead by example on climate reporting.
TRANSITION PLAN SETS PATHWAY TO NET ZERO
The second Climate Transition Plan update lays out the pathway the Bank intends to follow to reach its net-zero operational target, updating milestones, governance arrangements and metrics used to track progress. It is designed to give a clearer view of how commitments made in earlier iterations of the plan are being translated into concrete actions.
The plan also brings together the actions the Bank is taking to manage climate risk on its balance sheet, integrating climate considerations into the way it manages holdings acquired in the course of its policy operations. That approach reflects the growing view among central banks that climate risk is not confined to operations but permeates the assets they hold.
By publishing an updated transition plan, the Bank is aligning its own disclosure practice with the direction of travel expected of large UK financial institutions, where transition planning is becoming a central pillar of climate-related regulation. The Bank has signalled that it wants its own reporting to remain at the forefront of the discipline.
DISCLOSURE ALIGNED WITH TCFD
The 2026 climate-related financial disclosure covers the Bank's operations, its financial exposures and the portfolios held for monetary policy purposes, with governance and metrics aligned with the recommendations of the Task Force on Climate-related Financial Disclosures. The TCFD framework has become the reference point for climate reporting by financial institutions globally.
The disclosure sets out data on emissions from the Bank's own activities and on the climate characteristics of its financial holdings, along with information on how climate risks are identified, assessed and managed within its governance framework. That structured approach is intended to make the information useful for external stakeholders.
Governance content in the report describes how climate-related responsibilities are allocated within the Bank, while metrics sections provide quantitative anchors for tracking performance over time. Together the elements aim to allow readers to hold the institution to account against its stated commitments.
Alongside the transition plan update, the report gives market participants, parliamentarians and other stakeholders a comprehensive view of how the Bank of England is approaching climate risk in its own operations and financial activities. It also reinforces the message that climate considerations remain a permanent feature of how the Bank thinks about its balance sheet and its wider policy footprint.
For the wider UK financial system, the Bank's disclosure and transition plan set a reference point that supervised firms can look to as they prepare their own reports. The alignment with the TCFD framework and the inclusion of monetary policy portfolios in the disclosure reinforce the message that climate risk sits at the core of prudent central-bank operations.