UK to turn TCFD reporting into law
October 19, 2021
The UK government has announced plans to make climate reporting a legal requirement for more than 1,300 publicly traded companies ahead of COP 26.
The government announced last week that the country’s largest companies and financial institutions would be legally required to report in line with the recommendations of the Task Force for Climate-related Financial Disclosures (TCFD) from 6 April 2022.
The decision comes as the UK prepares to host the COP26 conference, beginning on 31 October, which is set to be a crucial event in the global efforts to reduce the impacts of climate change.
In a statement, the Department for Business, Energy and Industrial Strategy said: “The new requirements will help investors and businesses to better understand the financial impacts of their exposure to climate change, and price climate-related risks more accurately, while supporting the greening of the UK economy.”
Energy and climate change minister Greg Hands added that companies and investors needed to “put climate change at the heart of their activities and decision making”.
John Glen, economic secretary to the Treasury, said the TCFD requirements would help address greenwashing concerns through standardisation of reporting, as well as allowing investors and companies to “align their long-term strategies with the UK’s net zero commitments”.
Several companies already disclose data in line with the TCFD’s guidelines, including Tesco, Unilever, and Aviva.
In addition, the Department for Work and Pensions is rolling out similar TCFD-linked reporting requirements for major pension funds, requiring them to publicly disclose their exposures and detail any mitigation work they are undertaking.
Earlier this month, the government published its Net Zero Strategy, setting out how it plans to achieve country-wide net zero carbon emissions by 2050 in line with global climate goals.
It includes plans to boost renewable energy provision to reduce fossil fuel reliance, give more pricing certainty, create jobs, and mobilise £90bn worth of private sector investment over the next 10 years.
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