Today, the Government published their consultation on proposals requiring mandatory climate-related financial disclosures by publicly quoted companies, large private companies and limited liability partnerships (LLPs).
In November 2020, the Chancellor of the Exchequer announced that in order to accelerate progress on climate risk disclosures, the UK will move towards mandatory Taskforce on Climate-Related Financial Disclosures (TCFD) across major segments of the UK economy by 2025, with a significant portion of requirements to be introduced by 2023. This will make the UK the first G20 country to make TCFD-aligned disclosures mandatory across the economy.
TCFD is an industry-led initiative which seeks to develop recommendations for climate-related financial disclosures. In 2017, the TCFD launched its recommendations, which set out how companies of any size, and in any sector or geography, could better manage and disclose their climate-related financial risks. Our proposed regulations will require companies to disclose information in line with the four pillars of TCFD: governance, strategy, risk management and metrics and targets.
High-quality disclosure of how organisations will manage the material financial risks and opportunities arising from climate change will improve transparency and encourage better informed pricing and capital allocation. As a result, and over time, TCFD-aligned disclosures will support investment decisions aligned with our transition to net zero. Our ambitious proposals will ensure the UK is leading the way ahead of COP26, where we will have an opportunity to encourage other countries to replicate our action.
I will place a copy of the consultation document in the Libraries of both Houses.
[HCWS880]