SS5/25: The deadline for internal reviews against the new standards is here

On 3 December 2025, the Prudential Regulation Authority (PRA) released updated expectations for how firms should manage climate-related risks, replacing SS3/19, which had been in place for over six years.

To meet the enhanced expectations of the supervisory statement, firms were expected to conduct internal reviews, identify gaps, and define action plans. With the review deadline now reached, firms should have credible and ambitious timelines in place to address any shortcomings.

Internal reviews and remediation plans

By expecting credible and ambitious remediation timelines, the PRA is seeking to strike a balance. This approach maintains momentum in advancing climate-related risk management practices, while acknowledging both the scale of change across firms and the evolving nature of the discipline.

Ongoing developments in areas such as data and methodology mean that best practice will continue to evolve over time. As a result, fully meeting SS5/25 expectations immediately may not be realistic for many firms.

Early remediation activities

In applying the expectations, SS5/25 outlines that risk identification, assessment and sign-off (materiality assessment) is the first step in a two-step process of managing climate-related risks.

Gaps identified in the materiality assessment will therefore need to be remediated early in the timetable. This is likely to cover both frameworks, whether new or enhancements to existing ones, and the more foundational elements of climate scenario analysis (CSA), data, and methodology required to support the materiality assessment.

Subsequent remediation activities

Responding to material risks is the second step. While firms already respond to climate-related risks, the enhanced expectations of SS5/25 mean that additional gaps are likely to be identified and subsequently addressed through remediation plans.

This will include activities to improve the quality, coverage, and granularity of climate-related data, which underpins both reporting and risk appetite setting. SS5/25 also places climate scenario analysis at the centre of managing climate-related risks, meaning gaps in more advanced scenario analysis capabilities will form an important part of remediation.

Insurance specific gaps and remediation

For insurers, the most significant gaps are likely to sit in the depth of climate scenario analysis and in climate-specific risk appetites linked to the Solvency UK balance sheet, alongside the granularity of underlying data, including catastrophe data for non-life and asset-side data for life.

Remediation plans will typically address materiality frameworks and risk appetite early, with data enhancements and more complex scenario analysis delivered over longer timeframes.

What happens next?

While the deadline for internal reviews has now passed, there remains scope for change. The PRA may request evidence of reviews and provide firm-specific feedback, as well as thematic observations following a broader review of submissions.

In parallel, firms may revisit their remediation timelines as they encounter the practical challenges of delivering against the new expectations. What is clear is that climate-related risk management in the UK is set to undergo its most material change to date, and that change is already underway.

Get in touch

4most can support your organisation with gap assessments and remediation plans. Email us to learn more about how we can help – info@4-most.co.uk.