From: RegTech Analyst
The Financial Conduct Authority (FCA) has asked British businesses about what they think about new proposals outlining climate-related disclosure requirements for companies.
The proposed new rule would require all commercial companies with a premium listing to either make climate related disclosures consistent with the approach set out by the Taskforce on Climate-related Financial Disclosures (TCFD) or explain why not.
The FCA also said it is thinking about extending this rule to a wider scope of issuers.
The proposals set out in the Consultation Paper build upon the recommendations of the TCFD, an existing global standard.
The FCA is also seeking feedback on clarifications to how existing requirements applicable to all listed companies already require climate- and other sustainability-related disclosure.
The FCA recognises that standards for disclosure and companies understanding of the financial impacts of climate change are evolving. For this reason, where companies are not yet able to make full disclosures, they should provide an explanation of the reasons why.
“Climate change presents a serious and wide-ranging threat to global economic prospects, society more broadly and our natural environment,” said Andrew Bailey, FCA Chief Executive. “The changes we propose will help to provide the transparency the market needs to be able to assess how well companies are adjusting to the risks of climate change. Improved disclosures will support better asset pricing and enable investors to make more informed choices about where to allocate their capital – which will ultimately support the transition to a low carbon economy.”
The work of the Climate Financial Risk Forum – an industry group that the FCA launched jointly with the Bank of England’s Prudential Regulation Authority in March last year – will also help to build disclosure capabilities.
The consultation period closes on June 5, 2020.
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