FCA tells firms to improve climate-related disclosures

The Financial Conduct Authority has published proposals outlining new climate-related disclosure requirements for listed companies.

All companies with a premium listing will have to make climate related disclosures consistent with the approach set out by the Taskforce on Climate-related Financial Disclosures or explain why not.

Chief exec, Andrew Bailey, said: “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 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 and will soon be publishing industry guidance, covering climate-related disclosures, risk management, scenario analysis and innovation.

The FCA is also currently considering how best to enhance climate-related disclosures by regulated firms, including asset managers and life insurers, to ensure a coordinated approach.

Gill Lofts, EMEIA head of sustainable finance at EY, welcomed the new proposals, saying, “This is a very positive step forward in the journey to a more sustainable future, placing significant responsibility at the doorstep of individual companies to ensure they are acting with the environment in mind. In a recent industry poll across the financial services sector we found that over two thirds (69%) of respondents have already mobilised a targeted programme to respond to climate change in the last year, and while this is welcome news, the pace of activity must ramp up if we are to see real progress.”

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