The UK Government, FCA and FRC advance the pace of TCFD adoption

On 9 November the Chancellor of the Exchequer, Rishi Sunak, announced at the Green Horizon Summit that the UK will become the first country in the world to make Task Force on Climate-related Financial Disclosures (TCFD) aligned disclosures mandatory across the economy by 2025, with a significant portion of mandatory requirements in place by 2023.

Alongside this, the Financial Conduct Authority (FCA) announced that it is introducing rules requiring premium-listed companies to adopt TCFD reporting from next year. This will apply to companies with reporting periods beginning 1 January 2021 and will initially be introduced on a ‘comply or explain’ basis.

Commenting, Nikhil Rathi, Chief Executive Officer of the FCA, said: “We generally expect companies to be able to comply.”

Further detail on the FCA announcement can be found here and a timeline of planned or potential regulatory actions or legislative measures over the next five years is available here. The full report can be found here.

On 10 November the Financial Reporting Council (FRC) announced its support for the introduction of global standards on non-financial reporting, but, as an interim step, encourages public interest entities to report against the TCFD’s recommended disclosures and the Sustainability Accounting Standards Board (SASB) metrics for their sector. The FRC’s Climate Thematic report provides more detail.
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