UK's FCA seeks views on increasing climate-related disclosure rules

UK regulator the Financial Conduct Authority (FCA) set out for consultation Tuesday further climate-related reporting rules for listed companies and some types of regulated firms.

The FCA is proposing to:

• Extend the application of its Task Force on Climate-Related Financial Disclosures (TCFD)-aligned Listing Rule for premium-listed commercial companies to issuers of standard listed equity shares.
• 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.

Comments on the proposals are due 10 September 2021.

Sheldon Mills, the FCA’s executive director, Consumer and Competition, said: “Managing the risks of climate change and transitioning to a cleaner and less carbon-intensive economy will require high-quality information on how climate-related risks and opportunities are being managed throughout the investment chain.”

He said that climate-related disclosures do not yet meet the needs of investors and market participants. “The new rules will help markets, investors, and ultimately consumers better understand the impact of climate change and make more informed decisions,” he added.

The FCA said the proposed rules should help with investment in more sustainable projects and activities, consistent with Chancellor of the Exchequer Rishi Sunak’s recommendations to UK financial regulators set out in March. In the letter to the FCA, Sunak said that it should “have regard to the government’s commitment to achieve a net-zero economy by 2050”.

In its consultations, the FCA is also seeking views on other environmental, social, and governance (ESG) issues in capital markets, including on green and sustainable debt markets and the increasingly prominent role of ESG data and rating providers.

— Oliver Rowe (Oliver.Rowe@aicpa-cima.com) is an FM magazine senior editor.