FCA Feedback Statement on Climate Change
In October 2019, the Financial Conduct Authority (FCA) issued a Feedback Statement on Climate Change and Green Finance (FS19/6) in response to its October 2018 Discussion Paper (DP18/8) which discussed reporting of climate change-related matters by listed companies.
In the Discussion Paper, the FCA sought views on whether issuers give investors appropriate information in relation to climate change and whether the issuers require clarity as to what is expected on them.
The FCA note in the Feedback Statement that many respondents acknowledged that existing disclosure requirements already capture material climate-related risks and that the Financial Stability Board's Taskforce on Climate Related Financial Disclosures published in July 2017 (TCFD) provided a useful framework for climate-related disclosures.
The FCA has stated that it intends to publish a consultation paper in early 2020, which will:
- propose new disclosure rules for certain listed companies, aligned with the TCFD's recommendations, on a "comply or explain" basis; and
- clarify listed companies' existing disclosure obligations relating to climate change risks.
FRC report on climate-related reporting
The Financial Reporting Council's (FRC) Financial Reporting Lab published a report on climate-related reporting in November 2019. The report provided practical guidance on how companies can improve their climate-related reporting. The report, which is structured around the TCFS framework, outlines what investors want to understand and what questions companies should be asking themselves, as well as setting out recommended disclosures and examples of reporting in practice.
