FCA new rules on climate-related disclosures

The UK Financial Conduct Authority will introduce new rules on 1 January 2202 requiring issuers of listed shares and asset managers to disclose how they will meet the recommendations of the TCFD.

The FCA says that better corporate disclosures will help inform market pricing and support business, risk and capital allocation decisions. And improved disclosures to clients and consumers will help them make more informed financial decisions.

Issuers of standard listed shares, or equity shares represented by certificates must now include a statement in their annual financial reports setting out whether their disclosures meet the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD). If they don’t, they’ll need to explain why.

FCA-regulated asset managers and asset owners – including life insurers and pension providers – will have to disclose how they take climate-related risks and opportunities into account in managing investments. They’ll also have to make disclosures about the climate-related attributes of their products.

The rules will come into effect from 1 January 2022. Asset managers and asset owners will have a phased implementation, with the rules initially applying to the largest firms and coming into effect for smaller firms one year later.