On October 29, 2021, the UK Department for Business, Energy and Industrial Strategy, along with HM Treasury and two members of Parliament, announced proposed requirements concerning the disclosure of climate-related financial information.
If the legislation is approved by Parliament, some of the largest traded companies in the UK, as well as banks, insurers, and private companies with over 500 employees and £500 turnover, will be required to disclose climate-related financial information in line with the recommendations of the Taskforce on Climate-Related Financial Disclosures (TCFD). The TCFD was launched in 2015 by the Financial Stability Board, and Mark Carney, the UN Special Envoy on Climate Action and Finance and UK Finance Adviser for COP26. The proposed framework for mandatory climate disclosures is designed to increase transparency, and to help companies and investors better manage both risks and opportunities. It will expand significantly both the scope and quality of climate-related reporting among companies subject to the law, and will provide companies with a uniform system for assessing the impact of climate change on their operations. It will apply for accounting periods starting on or after April 6, 2022.
With this legislation, the UK will be the first of the G20 nations to enact mandatory disclosure requirements aligned with the recommendations of the TCFD.