The Financial Conduct Authority (FCA) published a technical note on the Task Force on Climate-Related Financial Disclosures (TCFD) aligned climate-related disclosure requirements for listed companies.
The new listing rules, LR 9.8.6R(8) and LR 14.3.27R, require premium listed commercial companies and certain standard listed companies to include a statement in their annual financial report, setting out:
- whether they have made disclosures consistent with the TCFD recommendations and recommended disclosures in their annual financial report
- where they have not made disclosures consistent with some, or all, of the TCFD recommendations and/or recommended disclosures, an explanation of why, a description of any steps they are taking or plan to take to be able to make consistent disclosures in the future, and the timeframe within which they expect to be able to make those disclosures.
- where they have included some, or all, of their disclosures in a document other than their annual financial report with an explanation of why, and
- where in their annual financial report (or other relevant document) the various disclosures can be found.
In addition, the listed companies may be required to make disclosures on climate-related and other environmental, social, and governance (ESG) matters in certain circumstances under other provisions of the Listing Rules, or under particular provisions of the Disclosure Guidance and Transparency Rules, Market Abuse Regulation, and Prospectus Regulation. While listed companies may seek the views of third parties (including external auditors and other advisers) when compiling and reviewing the climate-related financial disclosures to be included in their annual financial report, it is ultimately for a listed company, using its knowledge of the company’s actual and expected activities, operating environment and exposure to physical and transition risks, to ensure that it complies with LR 9.8.6R(8) or LR 14.3.27R (as appropriate).
Keywords: Europe, UK, Banking, TCFD, ESG, Disclosures, Climate Change Risk, Listing Rules, Listed Companies, FCA
Dr. Denton provides industry leadership in the quantification of sustainability issues, climate risk, trade credit and emerging lending risks. His deep foundations in market and credit risk provide critical perspectives on how climate/sustainability risks can be measured, communicated and used to drive commercial opportunities, policy, strategy, and compliance. He supports corporate clients and financial institutions in leveraging Moody’s tools and capabilities to improve decision-making and compliance capabilities, with particular focus on the energy, agriculture and physical commodities industries.
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