Government proposals on mandatory climate-related reporting

The government has published a roadmap towards mandatory climate-related disclosures and a report from the UK’s joint Government-Regulator TCFD taskforce. These reports form part of the government’s green finance strategy.

The roadmap sets out an indicative path towards mandatory climate-related disclosures across the UK economy which are aligned with the recommendations of the TCFD. The proposals cover seven categories of organisation: listed commercial companies; UK-registered companies; banks and building societies; insurance companies; asset managers; life insurers and FCA-regulated pension schemes; and occupational pension schemes

The key implementation issues and timelines for corporates described in these reports include:

• Listed companies – The reports confirm that the FCA intends to introduce new disclosure requirements based on the TCFD recommendations for premium listed companies. These requirements would apply on a “comply or explain” basis and will come into force for financial years beginning on or after 1 January 2021. The FCA consulted on this proposal in March 2020 (see our blog post at the time) and the reports state that the FCA aims to publish a policy statement by the end of 2020. The documents also note that the FCA intends to publish a further consultation paper in the first half of 2021 seeking views on making these disclosures mandatory (rather than “comply or explain”) and widening the scope of the requirements to other listed companies, including standard listed companies.
• UK-registered companies – The reports state that the government intends to consult on measures which would require companies registered in the UK to make TCFD-aligned disclosures in their annual report and accounts. The government intends to consult on the proposals, including the companies that should be in scope, in early 2021 and for legislation to be passed implementing these changes by mid-2021.