Physical climate risk data,
evidenced for SS5/25.

SS5/25 is the PRA's supervisory statement on managing climate-related financial risks, published on 3 December 2025 alongside Policy Statement PS25/25 and in force since that date. It replaced SS3/19 in its entirety. SS5/25 has 140 paragraphs (compared to 32 in SS3/19) organised into seven chapters: governance, risk management, climate scenario analysis, data, disclosures, banking-specific issues and insurance-specific issues. The PRA describes it as a step change, not a refinement: climate risk is now treated on a par with credit, market and liquidity risk.

SS5/25 applies to all UK PRA-regulated banks, building societies, PRA-designated investment firms and (re)insurers, including Solvency II firms, non-Solvency II firms, Lloyd's and managing agents. UK branches of overseas firms are out of scope. Proportionality is based on materiality of climate-related risk exposure, not firm size: smaller firms with material exposures still meet the detailed expectations.

3 June 2026 closed the six-month window in which firms were expected to complete an internal gap analysis against SS5/25 and put a credible and ambitious plan in place, with board sign-off on materiality assessments. That window was never an implementation deadline: the PRA did not expect gaps to be closed by then, only reviewed, owned and scheduled. What changed on 3 June is that supervisors can now ask to see the internal review and the action plan, and from that date firms are expected to be able to show a credible timetable for addressing anything still open. In practice the burden of proof has shifted from intent to evidence, and remediation timelines are now a matter of supervisory engagement rather than a published date. Firms that treated the window as a paper exercise are the ones now exposed: a survey of 67 insurers published by Crowe in February 2026 found that 51% had not yet completed a gap analysis with under four months to run.

SS3/19 (2019) was a wake-up call to start embedding climate risks. SS5/25 is the prudential framework: a fourfold increase in paragraphs, sharper expectations, climate risk explicitly on par with credit, market and liquidity risk. Key shifts include integration into ICAAP, ILAAP and ORSA; a documented risk register with materiality judgments substantiated; asset-level data rather than postcode averages; and CSA that demonstrably drives ALCO and board decisions. SS5/25 is also explicitly aligned with the BCBS climate principles and the ISSB disclosure baseline.

SS5/25 Chapter 3 expects multi-pathway scenario analysis calibrated against IPCC and NGFS benchmarks, with a central case plus tail-risk intensifications. Methodologies, assumptions and calibration must be documented; firms with larger exposures are expected to use more mathematically sophisticated approaches. CSA must demonstrably flow into strategic decisions: ALCO and board packs, ICAAP, ILAAP and ORSA, capital and reserving, and counterparty and sector limits. Historical data alone cannot answer the forward-looking questions SS5/25 asks, which is why scenario analysis has consistently been reported as the most resource-intensive chapter to stand up.

Yes, in the sense that matters prudentially. SS5/25 expects firms to identify, measure and manage material climate risks, and managing a physical risk means knowing what can be done about it: flood defences, property-level resilience measures, retrofits, siting and construction decisions at origination. Where a firm books a lower exposure because a defence exists, that assumption sits inside the risk assessment and needs the same evidence trail as any other input, including how it is maintained and when it is revisited. Adaptation also connects the risk view to the business case, because the cost of the measure and the loss it avoids are what turn a hazard score into a decision a credit or underwriting committee can actually take. Adapt is built for that step.

The disclosure picture has moved since SS5/25 was drafted. The UK government published the final UK Sustainability Reporting Standards, UK SRS S1 and S2, on 25 February 2026, based on the ISSB standards with targeted UK modifications, for voluntary use in the first instance. The FCA consulted in CP26/5 on aligning listed issuers' sustainability disclosures with UK SRS and retiring the existing TCFD-aligned rules; that consultation closed on 20 March 2026, the FCA has signalled a policy statement in autumn 2026, and the proposed rules would apply from 1 January 2027. Mandatory application beyond listed issuers depends on the government's Modernising Corporate Reporting work. For SS5/25 purposes the practical reading is unchanged: be TCFD-aligned today, map to UK SRS S2 now rather than later, and make sure the physical risk narrative rests on the same asset-level evidence that sits behind your ICAAP, ILAAP or ORSA.

Climate X provides asset-level physical climate risk data built for SS5/25 Chapter 4 data expectations and the scenario analysis Chapter 3 demands. The Spectra platform covers 2 billion+ assets globally across 12 physical hazards, with multi-pathway scenarios using IPCC CMIP6 SSPs, CMIP5 RCPs and NGFS pathways across 2030, 2050 and 2100 horizons, and translation of hazard exposure into expected loss in pounds for IFRS 9 ECL banking inputs and SCR insurance calibration. Adapt costs the response, asset by asset, so a defended risk position is an evidenced one. Methodology is ISO 27001 and ISO 14001 certified and built to be defensible against SS1/23 model risk principles. Explore Spectra or talk to a climate risk expert about the evidence behind your action plan.