Making your SS5/25 climate action plan meaningful

How can organisations unlock their SS5/25 gap analysis and action plan to drive strategy and create organisational value?

The Prudential Regulation Authority (PRA) issued an updated Supervisory Statement outlining expectations for managing climate-related risks, SS5/25.

Organisations are now expected to conduct an internal review of their current status and develop a corresponding action plan, with a deadline of Wednesday 3 June 2026. However, this process does not have to be solely about meeting regulatory requirements – it can also serve as a valuable strategic tool, extending beyond compliance to deliver value.

Read our overview of the SS5/25.

The gap analysis

A gap analysis is the essential first step in responding to SS5/25. It involves an honest review of an organisation’s current status against the updated PRA expectations, identifying areas of compliance and where your organisation falls short.

As organisations start the gap analysis, several key questions frequently arise.

Where do I find the information that I need to complete the analysis?

Consider a range of sources: internal documents, reports, the own risk and solvency assessment (ORSA), and even interviews, both internal and, if you’re feeling bold, external.

How detailed should my analysis be?

A comprehensive line-by-line review ensures that all aspects of the expectations have been considered. Demonstrating this granular assessment can also make it easier to justify the remediation action plan to the PRA. Organisations can then narrow the focus in the action plan.
Having the detail enables an accurate view of the ‘bigger picture’ to be defined and communicated.

How do I undertake the analysis?

Using a simple red (non-compliant), amber (partially compliant), and green (compliant) retrieval-augmented generation (RAG) system can help organisations assess alignment. However, relying solely on the rating may not provide sufficient detail; organisations should document why each area is rated as it is and where the supporting information comes from.
Remember, not all items are equal in terms of their importance or the effort required to address them.

How do I apply the PRA’s expectations proportionately?

The PRA expects organisations to tailor their approach based on size, complexity, and risk profile. The assessment should be an honest reflection of an organisation's current status against realistic expectations. However, proportionality should be a practical lens for analysis, whilst ensuring the plan is both ambitious and achievable.
Proportionality means producing a meaningful and tailored solution fit for your organisation and not a justification for ‘minimum viable compliance’.

The action plan

An effective action plan translates the findings of the gap analysis into targeted steps to achieve an organisation’s strategic ambition and move toward full SS5/25 alignment. While gap analysis may be generic and focused on regulatory requirements, the action plan is an opportunity to tailor solutions that fit the organisation’s unique context and priorities.

We have three tips to create an effective action plan:

1. Create a proportionate action plan

The PRA expects firms to manage risks proportionately, focusing on the most material exposures. Therefore, the results of a materiality analysis are central to action planning and help to prioritise actions. Some actions, such as conducting detailed quantitative scenario analysis, may be relevant only for the most material risks, while others apply more broadly.

2. Establish governance

Specify who is responsible for the action plan and define how progress will be tracked and reported. Ensure that the executive responsible for climate change under the Senior Manager Regime is closely involved. Board engagement can also help to ensure oversight and momentum.

3. Continuous review

The PRA expects ongoing monitoring of the action plan, treating it as a live document. Organisations that regularly review and update the gap analysis and action plan are more likely to develop plans that remain relevant and effective. Making it part of your ongoing ORSA process and reporting cycle will embed this into your governance practices.

Moving from compliance to strategy

Developing an action plan provides an opportunity to move beyond regulatory compliance and adopt a more strategic approach. Rather than treating the process as a compliance exercise, organisations can use it to execute a strategic plan and integrate climate-related risk considerations across the business.

Strategic integration

The action plan should be firmly linked with the wider business strategy and risk management framework(s) in place. This means ensuring that the actions are informed and reflected in core strategic documents and processes, rather than remaining isolated compliance activities. By doing this, the strategic action plan can help to identify opportunities for innovation and sustainability improvements, even where these extend beyond the regulatory requirements.

Aligning frameworks

A comprehensive action plan integrates all relevant reporting frameworks and regulatory requirements into one plan. Addressing them together enables the creation of a cohesive and comprehensive strategic plan, reduces duplication, and ensures actions are aligned.

Integrating resource planning

As no organisation can progress every action at once, resource planning is central to designing a realistic and impactful action plan. Clear visibility of resourcing and budget requirements also supports effective business planning. Importantly, activities cannot sit solely with sustainability teams; different functions will need to contribute, which may require refinement of the organisational operating model. Read more about operating models.

Materiality considerations

The PRA is clear that organisations should focus on the most material climate risks, focusing primarily on financial materiality. Firms may already have sustainability materiality assessments in place for other reasons. There may be benefits from using a double materiality approach. Whether to use single or double materiality depends on the organisation’s regulatory obligations and strategic aims. Read more about double materiality assessments.

Embedding data governance

The practical implementation of the action plan will depend on access to reliable and well-managed data. The plan should therefore set out what additional data is required to deliver the roadmap, where that data will be sourced, and how a data quality improvement plan will be put in place. Efficiencies can often be achieved by aligning data collection with other sustainability initiatives, for example, capturing nature-related information alongside climate-related underwriting data. This integrated approach strengthens data governance and supports wider sustainability objectives. Read more about data governance frameworks.

However, all elements of the action plan should be clearly linked back to the original gap analysis and the PRA’s guidance, ensuring transparency, clarity of purpose, and a strong audit trail. It is easiest to keep track of your current status, if you can link your completed action back to the specific SS5/25 requirement.

A meaningful SS5/25 action plan is more than a compliance exercise; it is a strategic tool for managing climate-related risks and driving organisational value. By conducting a thorough gap analysis, applying proportionality, integrating data and governance, and aligning with business strategy, organisations can create action plans that are both effective and impactful.For more information, please get in touch.