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Press release: 6 March 2020
Environmental lawyers have responded today to a major new move by the UK’s financial regulator on climate risks.
The Financial Conduct Authority (FCA) are proposing a new rule that would require all commercial companies with a premium listing to either make climate-related disclosures consistent with the approach of the Taskforce on Climate-related Financial Disclosures recommendations (TCFD) or provide an explanation of why they are not able to make full disclosures.
ClientEarth lawyer Daniel Wiseman said: “The Financial Conduct Authority has now made its position clear, sending a loud signal that climate change and the energy transition threaten to have major impacts on all listed companies, which, under existing UK law, must be disclosed.
“But in proposing a complicated ‘comply-or explain’ mechanism for introducing the TCFD recommendations, the FCA has completely dropped the ball.
“Markets, investors and consumers urgently want clarity on what businesses are doing to tackle climate change and align their business with the Paris Agreement goals. The FCA should just make the TCFD recommendations mandatory for all listed companies. This would be much cleaner and simpler and provide the certainty that companies and investors need to run their businesses effectively.”
In addition, the FCA is consulting on new technical guidance, clarifying that all listed companies already need to consider climate change and other environmental, social and governance (ESG) matters under a wide range of existing disclosure laws.
Wiseman added: “It looks like we are about to see a major uptick in climate action from the FCA and companies would be wrong not to take this seriously.”
Environmental lawyers at ClientEarth have previously sent numerous complaints to the UK’s financial regulators about companies breaching existing laws by failing to report climate-related risks.
Read about ClientEarth’s previous complaints to the FRC and FCA
Read ClientEarth’s December briefing: “UK financial regulators are missing in action on company failures to disclose material climate-related information”
ClientEarth lawyer Stephanie Morton in BusinessGreen: “On climate risk, financial regulators are leaving us exposed to a devastating crisis”
ClientEarth is a charity that uses the power of the law to protect people and the planet. We are international lawyers finding practical solutions for the world’s biggest environmental challenges. We are fighting climate change, protecting oceans and wildlife, making forest governance stronger, greening energy, making business more responsible and pushing for government transparency. We believe the law is a tool for positive change. From our offices in London, Brussels, Warsaw, Berlin and Beijing, we work on laws throughout their lifetime, from the earliest stages to implementation. And when those laws are broken, we go to court to enforce them.