Disclosure of climate-related financial information to come into force from 6 April 2022

The UK government has published a statement announcing that UK-registered companies and financial institutions will need to start disclosing climate-related financial information from 6 April 2022.

The requirements are based on the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) and are laid out in the Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2021, which was laid before parliament on 28 October 2021.

In the statement the government confirms that the requirements apply to all large firms (in both the regulated and unregulated sector) with over 500 employees and £500 million in turnover.

The announcement brings into force the government’s commitment, announced by Rishi Sunak in November 2020, that the UK will become the first country in the world to make TCFD-aligned disclosures fully mandatory across the economy by 2025, going beyond the ‘comply or explain’ approach.

The government consulted in March 2021 on its proposal to introduce mandatory TCFD-aligned climate-related financial disclosures. Following the feedback received, two notable changes have been made:

Firstly, the introduction of a ‘qualitative scenario analysis’ requirement which is intended to support companies in their assessment of climate-related risks and opportunities.

Secondly, the requirements will be more closely aligned with the recommendations of the TCFD, to ensure coherence with associated requirements introduced by the FCA and the Department for Work and Pensions.

According to the statement, non-mandatory guidance to support in-scope companies in their disclosures will be issued before the end of 2021, following parliamentary scrutiny of the regulations.