PRESS RELEASE: UKGBC responds to Chancellor’s announcements on green finance
The Chancellor has today announced that, by 2025, a significant number of UK companies will be obliged to report on their climate-related financial risks, in line with recommendations from The Task Force on Climate-related Financial Disclosures (TCFD). The joint Government Regulator TCFD Taskforce will also publish its interim report with a roadmap for implementing mandatory disclosures, many of which will come into force by 2023.
Earlier this year, the Financial Conduct Authority (FCA) had proposed that listed UK companies should disclose risks associated with different temperature scenarios, and their respective risk management processes linked to climate change. The upcoming regulations will apply to listed commercial companies, UK-registered large private companies, banks, building societies, insurance companies, UK-authorised asset managers, life insurers, FCA-regulated pension schemes and occupational pension schemes.
The Chancellor’s speech also introduced a range of green-finance related initiatives, including plans for green sovereign bonds and a green taxonomy – a common framework for determining which activities can be defined as environmentally sustainable. The measures are intended to bolster the UK’s position as a world-leading green finance hub ahead of COP 26.
The announcement was repeated at the Green Horizon Summit, which UKGBC chief executive, Julie Hirigoyen, spoke at, which also featured contributions from the Rt Hon Minister for Clean Growth – Kwasi Kwarteng, and Mark Carney – UN Special Envoy for Climate Action and Finance and Prime Minister’s Finance Adviser for COP26.
Julie Hirigoyen, Chief Executive at UKGBC said:
“We welcome the Chancellor’s announcement today that UK companies will be required to report both their climate impact and risks in line with recommendations from the Task Force on Climate-related Financial Disclosures.
“In the inevitable transition to a net zero carbon economy, every single financial asset faces significant economic and financial risks. For real estate asset investors, this is particularly acute given their vulnerability to the physical risks of extreme weather events, and their obvious targeting from a regulatory standpoint. UKGBC has long been calling for climate-risk disclosure in line with TCFD recommendations to be mandatory, and this announcement today will undoubtedly help investors with more resilient capital allocations and portfolio management decisions.”