FCA extends climate disclosure rules to more firms

The Financial Conduct Authority is planning to extend climate-related disclosures to more listed companies as well as to asset managers and life insurers.

The regulator introduced disclosure rules for premium-listed companies in December and plans to extend the requirement to standard-listed companies. Asset managers, life insurers and regulated pension providers will also have to make disclosures.

Sheldon Mills, the FCA's executive director of consumer and competition, said: "Managing the risks of climate change and transitioning to a cleaner and less carbon-intensive economy will require high quality information on how climate-related risks and opportunities are being managed throughout the investment chain."

The rules are based on recommendations produced by the international Taskforce on Climate-related Financial Disclosures which reported in 2017. The guidelines cover risk management, governance, strategy, metrics and targets.

The FCA said the proposed rules are designed to help make sure that the right information on climate-related risks and opportunities is available along the investment chain – from companies to financial services firms and clients and consumers. It said the disclosures should help encourage investment in more sustainable projects and activities in line with the government's request that the FCA acts on the UK's goal to be net-zero by 2050.

The FCA is inviting feedback to both consultations by 10 September 2021 and intends to confirm its final policy on climate-related disclosures before the end of 2021.