FTSE 350 companies will be forced to make climate-related disclosures in line with global standards under a proposal by the Financial Conduct Authority.
Firms choosing not to report and follow guidelines and standards set out by the Taskforce on Climate-related Financial Disclosure must explain why.
The financial services watchdog wants premium listed companies — which a spokeswoman said includes FTSE 350 firms — to disclose climate-related impacts to help investors compare asset values and to ensure assets are not mispriced.
Issuers of global depository receipts, debt and securitized derivatives will also be forced to make similar disclosures, the FCA said. If a company chooses not to make disclosures, or is unable to do so, it must explain why.
The FCA is seeking feedback on whether a wider set of issuers should be subject to the rules. It also wants suggestions about proposed clarifications to existing sustainability-related requirements for listed companies.
"The changes we propose will help to provide the transparency the market needs to be able to assess how well companies are adjusting to the risks of climate change. Improved disclosures will support better asset pricing and enable investors to make more informed choices about where to allocate their capital – which will ultimately support the transition to a low carbon economy," Andrew Bailey, CEO of the FCA, said in a news release.
Industry responses to the FCA proposal are due by June 5.