The Financial Conduct Authority (FCA) has published a consultation on enhancing climate-related disclosures by standard listed companies (CP21/18). This consultation follows the FCA's policy statement (PS20/17) on climate related disclosures by premium listed companies, published in December 2020, which introduced Listing Rule 9.8.6(8), requiring premium listed companies to report climate-related information in line with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations and recommended disclosures (the TCFD Recommendations) on a comply and explain basis.
For accounting periods beginning on or after 1 January 2022, the FCA proposes to expand the existing rules under LR 9.8.6(8) to issuers of standard listed equity shares (as included in LR14), excluding standard listed investment entities and shell companies. Therefore, under the new proposal, standard listed companies would be required to include a statement in their annual financial report which sets out whether the report contains disclosures consistent with the TCFD June 2017 recommendations, and to explain why, if it does not.
The new rule for standard listed companies – and associated guidance – would be located in LR 14 is intended to directly mirror the structure and wording of the rule and associated guidance in LR 9.8.6R(8) and LR 9.8.6BG to LR 98.6EG for premium listed commercial companies. For more information on LR 9.8.6(8) and related obligations see our briefing for premium listed companies.
The FCA is also seeking feedback on the rationale for (and potential approach to) extending the application of these requirements to issuers of standard listed debt (and debt-like)
Securities (as included in LR 17), standard listed issuers of global depositary receipts (GDRs) (as included in LR18) and standard listed issuers of shares other than equity shares.
In addition, to inform their ongoing policy work, the FCA is looking to generate discussion and engage stakeholders on the topic of ESG integration in UK capital markets. Specifically, aiming to cover (a) Issues related to green, social or sustainability labelled debt instruments, and (b) ESG data and rating providers. In relation to point (a), the FCA is particularly interested in the implications on (i) the Prospectus and ‘use of proceeds’ bond frameworks, and (ii) the role of verifiers and second party opinion providers.
The consultation is scheduled to close on 10 September 2021.
Contacts
