Rules to improve climate-related financial disclosure by U.K. asset owners, managers and corporate issuers were finalized Friday by the Financial Conduct Authority.
The rules, spelled out in two policy statements, go into effect Jan. 1 for the largest asset owners and managers, and one year later for others. Firms with less than £5 billion ($6.6 billion) in assets are exempt. Public disclosures under the requirements will start being due by June 30, 2023.
The FCA was the first securities regulator to mandate disclosure requirements for asset owners and managers that align with recommendations from the Taskforce on Climate-related Financial Disclosures. The latest rules are part of a governmentwide effort to introduce TCFD-aligned disclosures across the economy by 2025 as part of the U.K.'s net-zero commitment, the FCA said in the news release.
In the policy statement for asset owners and managers, the FCA said: "Our rules will directly impact asset managers, life insurers and FCA-regulated pension providers. They relate to a firm's role as a fiduciary — that is, how it takes climate-related matters into account in its management or administration of assets." Asset owners and managers will have to disclose how they take climate-related risks and opportunities into account in managing investments, and disclose the climate-related attributes of their products.
A separate policy statement for issuers of equities said that the rules finalized Friday "are part of a broader strategic aim to promote transparency on climate change and wider sustainability matters along the value chain." Issuers will now have to include a statement in their annual financial reports on whether their disclosures meet TCFD recommendations.