Proposed amendment to Listing Rule 9.8
The proposed amendments would require premium-listed companies to confirm in their annual financial reports (or in a separate document, clearly referenced in their annual report with an explanation as to why it cannot be published in their annual report) that they have published information consistent with the recommendations and disclosures outlined by the TCFD. This would include both overseas listed companies and state-owned entities. The intention is that rules will apply for financial years commencing 1 January 2021 (i.e. entities would need to report for the first time at the earliest on 1 January 2022).
Under the new rules, entities would need to make a statement setting out:
1 whether they have made disclosures consistent with the TCFD;
2 where they have either:
(a) not made disclosures consistent with some or all the TCFD recommendations/disclosures, or
(b) included some or all of the disclosures in a document other than their annual financial report
explain why (the so called "comply or explain" requirement)
3 state where their the disclosures can be found
Proposed Technical Note
As part of the Consultation, the FCA is also considering its guidance on existing obligations set out in EU legislation and its 'Handbook' of rules and guidance that already require certain issuers to disclose information on climate-related and wider environmental, social and governance ("ESG") matters. The proposals include the creation of a new "Technical Note" to clarify existing climate-related disclosures that are required to be made by all companies that are subject to the Listing Rules, Disclosure Guidance and Transparency Rules, Prospectus Regulation Rules and/or the Market Abuse Regulation.
The aim of the FCA in this Technical Note is to gather existing disclosure requirements in a single place and encourage a uniform approach to the disclosures made by issuers. Although it should be noted that the Technical Note does not introduce any new requirements, it does provide issuers with clearer guidance as to what obligations they should already be meeting and seeks to remove any potential uncertainty as to what is required of them.
The Consultation acknowledges the potential overlap with Streamlined Energy and Carbon Reporting requirements, which are further discussed in our article here.