The UK government set out Monday a broad programme that will bring together and streamline existing climate reporting requirements for companies, investors, and investment products.
Greening Finance: A Roadmap to Sustainable Investing outlines the legislative and regulatory changes that will be made across the economy to provide better environmental impact information. The Sustainability Disclosure Requirements (SDR) will apply to companies, pension schemes, investment products, and asset managers and owners, HM Treasury said.
Specific reporting requirements, including their scope, timing, and detail, will be developed following public consultation.
Every investment product will have to set out — for the first time — the environmental impact of the activities it finances, and justify clearly any sustainability claims it makes, the UK's treasury department said.
Asset managers will also need to set out how they incorporate sustainability into their investment strategy to allow consumers to make informed judgements about the kind of firms they want to invest in.
SDR will also set out expectations for certain firms on publication of transition plans towards net zero.
UK Chancellor of the Exchequer Rishi Sunak said the Roadmap will give the UK "the opportunity to set new global standards for sustainability that will boost the economy, protect the planet, and support our net-zero goals".
He added: "We want sustainability to be a key component of investment decisions, and our plans will arm investors with the right information to make more environmentally led decisions."
The Roadmap also sets out more details about a new green finance rulebook — the UK Green Taxonomy — that will create "a shared understanding of which economic activities count as green", HM Treasury said. Relevant companies and financial products will be required to report their environmental impact against the UK Green Taxonomy.
— Oliver Rowe (Oliver.Rowe@aicpa-cima.com) is an FM magazine senior editor.