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The FCA is proposing a disclosure regime for asset managers, life insurers, and pension providers.

By Paul Davies, Nicola Higgs, Victoria Sander, David Berman, Anne Mainwaring, and Charlotte Collins

On 22 June 2021, the FCA published a Consultation Paper (CP21/17) on introducing climate-related financial disclosure rules and guidance for asset managers, life insurers, and FCA-regulated pension providers. The disclosure requirements would be consistent with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations.

The FCA plans to introduce the disclosure requirements in a new ESG Sourcebook in the FCA Handbook. The regulator anticipates that this Sourcebook will expand over time to include new rules and guidance on other climate-related topics and wider ESG considerations.

The FCA is consulting on extending its rules to standard listed issuers.

By Paul A. Davies, Chris Horton, James Inness, Anna Ngo, and Charlotte Collins

On 22 June 2021, the FCA published a Consultation Paper (CP21/18) on extending the application of the existing climate-related disclosure requirements for commercial companies with a UK premium listing to a wider scope of listed issuers, so that all commercial companies that issue listed equity shares would be captured by the requirements. The FCA had previously announced that it was going to consult on this extension, so standard listed issuers were forewarned. The FCA plans to apply the requirements for accounting periods beginning on or after 1 January 2022.

New rule will require listed companies to state whether they have made disclosures in accordance with the TCFD.

By Paul A. Davies, Nicola Higgs, Chris Horton, and Michael D. Green

On 21 December 2020, the Financial Conduct Authority (FCA) confirmed in a published Policy Statement[1] (the Statement) that it will introduce a new Listing Rule (the Rule) requiring premium listed companies to state whether they have made disclosures pursuant to the Task Force on Climate-related Financial Disclosures (TCFD) recommendations, and if not, why.

The Rule comes in response to the FCA’s March 2020 Consultation Paper, under which the FCA sought to enhance climate-related disclosures by listed issuers and to clarify existing disclosure obligations. The Rule is a forerunner to the UK’s plan to fully align corporate disclosure with the TCFD by 2025. The Statement sets out that “better disclosure about organisations’ exposure to climate change risks and opportunities will lead to more informed pricing and drive investment towards greener projects and activities”, helping support net zero emissions ambitions. The FCA is hopeful that the implementation of TCFD-aligned disclosures will pave the way for an eventual international standard for corporate reporting that is also integrated with financial reporting.