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The UK to enshrine mandatory climate disclosures in law

The UK will enshrine mandatory climate disclosures for the largest companies in law. 

From April 2022, over 1,300 of the largest UK registered companies and financial institutions will have to disclose climate-related financial information on a mandatory basis – in line with recommendations from the Task Force on Climate-related financial disclosures. 

This will include many of the UK’s largest companies, banks and insurers, as well as private companies with over 500 employees and a £500m turnover. 

This decision will increase the quantity and quality of climate-related reporting across the UK business community, including among some of the most economically and environmentally significant companies.

This will ensure businesses consider the risks and opportunities they face as a result of climate change and encourage them to set out their emission reduction plans and sustainability credentials.

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The new requirements will also help investors and businesses to better understand the financial impacts of their exposure to climate change, and price climate-related risks more accurately, while supporting the greening of the UK economy. 

Energy and Climate Change Minister Greg Hands said: ‘If the UK is to meet our ambitious net-zero commitments by 2050, we need our thriving financial system, including our largest businesses and investors, to put climate change at the heart of their activities and decision making. 

‘By mandating large businesses to disclose their climate risks and opportunities – the first G20 country to do so – we are showing global leadership by making our financial system the greenest in the world.’

Economic Secretary to the Treasury John Glen added: ‘With COP26 in just a few days, I’m proud that we are taking firm steps to enshrine the UK’s transition to a greener financial system into law.

‘We are already world leaders in green finance, having recently launched the UK’s first Green Savings Bond and raised £16 billion for green projects through our Green Gilts.

‘These TCFD requirements will not only help tackle greenwashing but also enable investors and businesses to align their long-term strategies with the UK’s net-zero commitments.’

 

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