The FCA published proposals to improve climate-related disclosures by premium listed issuers in Consultation Paper CP20/3. Under the proposals, all commercial companies with a premium listing will be required to make climate related disclosures which are consistent with the approach taken by the Taskforce on Climate-related Financial disclosures (TCFD) or explain why they are not able to make the disclosures. The recommendations of the TCFD are an existing global standard.
The CP also asks for industry feedback on the clarifications provided on how existing requirements already require disclosures by listed companies on climate and other sustainability issues.
Greater transparency on how listed companies may be affected by climate related risks and opportunities will help to ensure that securities are more accurately priced, and help markets to work well. They will also enable investors to make more informed choices on how to invest. However, the FCA recognises that this is an evolving area and therefore, where companies are not able to make full disclosures, they should provide an explanation of the reasons why.
The FCA launched the Climate Risk Forum with the Prudential Regulation Authority (PRA) in March 2019 and the work of this Forum will also be considered when building disclosure requirements.
It is worth noting that the FCA is currently considering how to enhance disclosure requirements for regulated firms, including asset managers, to ensure a coordinated approach with the Government and other regulators, and considering relevant EU disclosure proposals and requirements.
The consultation period on CP20/3 was originally due to close on June 5, 2020, but this has been extended to October 1, 2020, as part of the extensions granted by the FCA due to the COVID-19 pandemic.