BEIS Consultation: Mandatory climate-related financial disclosures

ClientEarth welcomes the proposals from the Department of Business, Energy and Industrial Strategy (BEIS) to enhance climate change-related disclosure obligations for publicly quoted companies, large private companies and LLPs. However, in our view, in their current form, the proposals will fail to achieve their stated objectives. In order to provide investors, consumers and other stakeholders with the consistent, comparable and high quality climate-related information they need and expect, improvements must be made to the proposals in relation to content, application, accountability and enforcement.

In advance of preparing our more detailed response to the consultation, this briefing, sets out ClientEarth’s six key recommendations for improving the BEIS proposals. We welcome discussion on these matters and strongly encourage other stakeholders to consider and adapt these points in preparing their own responses to the consultation.

To achieve its objectives, the Government must amend the proposed disclosure obligations to:

• require companies to disclose against each of the 11 TCFD Recommended Disclosures;
• require companies to disclose a ‘Paris-aligned’ strategy and financial accounts, with a credible plan for how they can achieve ‘net zero’ GHG emissions by 2050 (TCFD+);
• make the proposed disclosure obligations mandatory in practice, not just in name, and avoid a confusing ‘comply or explain’ approach;
• provide investors with an advisory vote at company AGMs on the adequacy of company climate change strategies and targets;
• provide financial regulators with effective accountability and enforcement powers; and
• require auditors to provide assurance in relation to these disclosures.