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FCA issues consultation paper proposing improvements to climate-related disclosures for listed companies

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09 Mar 2020

The Financial Conduct Authority (FCA) has published a consultation paper (CP20/3) which proposes to enhance climate-related disclosures by companies with a UK premium listing and clarify existing disclosure obligations.

The consultation paper, which follows on from the FCA's related Discussion Paper and Feedback Statement issued last year, proposes to introduce a new continuing obligation in the Listing Rules (LR) referencing the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) on a 'comply or explain' basis. In particular, LR 9.8 (the new climate-related disclosure rule) would require premium-listed companies to include a statement in the annual report setting out:

  • whether they have made disclosures consistent with the TCFD's recommendations and recommended disclosures in their annual financial report;
  • an explanation of 'why' where they have:
    • not made disclosures consistent with some or all of the TCFD's recommendations and/or recommended disclosures; or
    • included some or all of the disclosures in a document other than their annual report; and 
  • where in their annual report (or other relevant document) the various disclosures can be found.

The FCA is also seeking feedback on guidance it proposes to issue, via a Technical Note, on existing obligations set out in EU legislation and in its Handbook, that may already require issuers to disclose information on climate-related (and other environmental, social and governance matters) in certain circumstances.  The guidance will be relevant for a wider scope of entities, incluing all companies with listed securities, not just those in the premium segment.  The proposed Technical Note is included in draft as an appendix to the Consultation Paper. 

The new rule is proposed to take effect for accounting periods beginning on or after 1 January 2021.  This will mean that the first reports issued in compliance with the new rule would be published in 2022. Responses to the Consultation Paper are requested by 5 June 2020. 

The press release and Consultation Paper are available on the FCA website. 

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