Fund groups and financial tech firms are to be offered incentives to open up new ethical and sustainable products and markets.
The Financial Conduct Authority has signed up 11 global regulators to agree a co-ordinated approach to developing the sector, it said, using as a model the 'global sandbox' it previously applied to pure fintech.
The plan was revealed in an FCA discussion paper on climate change and green finance. The regulator said it would reveal further details of the programme, and how to apply for it, at the end of the week.
Andrew Bailey, chief executive at the FCA said: 'Climate change presents a disruptive and potentially irreversible threat to the planet.
'The impact of climate change on financial markets is uncertain but legal frameworks – at a global, European and UK level – have already begun to adapt to reflect a move to a low carbon economy.
'The FCA can play a key role in providing more structure and protection to consumers for green finance products and ensuring that the market develops in an orderly and fairway which meets users’ needs.'
Other proposals include driving efficiency in the issuance, distribution or adoption of ‘green’ products and managing climate-related risk affecting market participants.
Details on how firms can apply to and benefit from the Innovate Green FinTech Challenge will be published on the FCA’s website on October 19.