The UK adopts global Taskforce on Climate-related Financial Disclosures (TCFDs) guidelines, introducing new regulations that demand large UK companies with a premium listing—a collective market capitalisation of approximately £1.9tn—to publicly disclose their climate change and net-zero transition risks by the end of 2023. This move aligns with international standards set by the TCFD.
Chancellor Rishi Sunak announced that starting from 2025, the rules will be further strengthened to fully enforce the TCFD guidelines, surpassing the 'comply or explain' approach. Consequently, the UK will become the first nation worldwide to mandate climate risk disclosures, setting a precedent for others to follow suit.
The scope of the new rules encompasses various sectors of the economy, including listed commercial companies, large UK private companies, banks and building societies, insurance companies, authorized UK asset managers, life insurers, FCA-regulated pension schemes, and occupational pension schemes, as outlined by the treasury.
The TCFD, a dedicated working group, has been entrusted with the task of establishing standardized disclosures enabling companies to showcase their resilience to climate change and sustainability to capital providers. Given the UK's proactive stance, it is anticipated that other countries will observe and emulate this ground-breaking example in the near future.
