Source · Select Committees · Treasury Committee
Recommendation 22
22
Paragraph: 182
The Government has moved from a voluntary to a mandatory approach for ensuring that firms...
Conclusion
The Government has moved from a voluntary to a mandatory approach for ensuring that firms make climate-related financial disclosures. But the process will be run to different timetables for different firms, across different regulators according to the Roadmap published by the Joint Government Regulator TCFD Taskforce. The Treasury, via the Taskforce, will need to play a key role in ensuring that pressure is maintained for a consistent and rapid implementation of these disclosures.
Paragraph Reference:
182
Government Response
Acknowledged
HM Government
Acknowledged
The UK’s joint regulator and Government TCFD Taskforce: Interim Report and Roadmap is a world-leading commitment to climate disclosures. Since publishing our Report, we have made significant progress towards achieving our ambition for mandatory climate-related financial disclosures across the UK economy. Following consultation, on 22 June the FCA published a consultation to extend the application of its TCFD-aligned Listing Rule for premium-listed commercial companies to issuers of standard listed equity shares, and to introduce TCFD-aligned disclosure requirements for asset managers, life insurers, and FCA-regulated pension providers, with a focus on the information needs of clients and consumers. Earlier this year, DWP consulted 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. The consultation proposes a review of pension scheme reporting in 2023, at which point DWP will consider broadening the scope of requirements. In March, BEIS launched its consultation proposing requirements for certain publicly quoted companies, large private companies and Limited Liability Partnerships (LLPs) to make TCFD-aligned disclosures. In addition, during his Mansion House Speech on 1 July 2021, the Chancellor announced that the UK intends to introduce economy-wide sustainability disclosure requirements covering real-economy corporates, financial services firms and pension schemes. This will include requirements on firms to disclose the impact they are having on climate and broader sustainability factors–and the risks/opportunities these pose to their business. This will incorporate TCFD disclosures but be wider in scope. It will also include disclosures under the UK green taxonomy which will provide firms and investors a common definition for environmentally sustainable economic activities. The Government intends to legislate to deliver this and will publish a Roadmap setting out the approach to green finance regulation ahead of COP26.