Recommendation 22

HM Government · verbatim extract Accepted

The Taskforce on Climate-related Financial Disclosures (TCFD) will be a powerful tool, but only if implemented properly. In the 2019 Green Finance Strategy (GFS), the Government established a UK TCFD Taskforce, chaired by HM Treasury and made up of regulators and Government departments, to consider a coordinated approach to implementing the TCFD recommendations in the UK. In November, the joint Government-Regulator TCFD Taskforce published its Interim Report and Roadmap outlining a pathway to mandatory climate-related financial disclosures across the UK economy. We believe the timelines set out in the UK Interim Report and Roadmap provide the right balance between showing ambition and allowing businesses, investors and asset owners enough time to prepare to disclose meaningful information. The UK Taskforce has closely examined cross-cutting issues such as interdependencies, capabilities and resourcing across market participants in order to coordinate a fit-for-purpose and proportionate regime with requirements that are appropriate in a UK context. The UK is taking an ambitious yet realistic approach to compliance, with a significant proportion of companies reporting by 2023, and regulatory action is moving in sequence to match this, as the Roadmap in the Taskforce’s Interim Report shows. Since publishing our Interim Report and Roadmap, we have made significant progress towards achieving our ambition for mandatory climate-related financial disclosures across the UK economy. In January 2021 the Department for Work and Pensions published its consultation on draft regulations requiring a variety of pension schemes to make certain TCFD disclosures, and to have effective governance, strategy, risk management and accompanying metrics and targets for the assessment and management of climate-related risks and opportunities, from 2021. In March 2021, BEIS launched its consultation proposing requirements for certain publicly quoted companies, large private companies and Limited Liability Partnerships (LLPs) to make climate-related financial disclosures in line with the TCFD recommendations. In June, the FCA published its consultation on proposals to extend the application of its TCFD requirements to standard-listed issuers. Finally, the Chancellor has made sustainability disclosures a key priority of this year’s G7 Finance Track and secured ambitious commitment for G7 countries to follow the UK’s lead in moving towards mandatory climate-related financial disclosures.