Largest UK companies required by law to disclose climate risks from April 2022
Published November 5, 2021
The UK Government has confirmed it will make it mandatory for Britain’s largest companies and financial institutions to report on climate-related risks and opportunities in line with recommendations from the Task Force on Climate-Related Financial Disclosures (TCFD).
The largest UK-registered companies and financial institutions will have to disclose climate-related financial information from April 2022. The law will apply to the UK’s largest traded companies, banks and insurers, as well as private companies with more than 500 employees and £500 million in turnover.
The TCFD is an industry-led group which works with companies to disclose consistent climate information so investors can understand their financial exposure to climate risk. The UK government will require the largest British companies to report in line with the TCFD’s set of recommendations.
The law is expected to increase the quantity and quality of climate-related reporting among British businesses. The focus on risks and opportunities should encourage businesses to set out their emission reduction plans.
By applying a common set of requirements aligned with the TCFD recommendations, UK companies will be provided with a uniform way to assess how climate change may impact their business model and strategy, and ensure they are well placed to harness opportunities from the UK’s transition to net zero.
When the legislation becomes law, the UK will become the first G20 country to mandate TCFD-aligned climate disclosures across the economy.
Taskforce on Climate-related Financial Disclosures (TCFD)