Powering Net Zero Commitments

World First: UK Organisations to Report on Climate Change Impact

Share this article on your social networks.

UK is to be the first nation to mandate disclosures about the business impacts of climate change by 2025. 

The U.K.’s Chancellor of the Exchequer Rishi Sunak stated on Monday that the nation would require businesses operating within its jurisdiction to report on their operating impacts on climate change. 

The U.K. stated that companies would be required to report the financial impacts of climate change on their businesses within the next five years. This announcement makes the UK the first country to mandate disclosures as governments and investors demand corporations reduce their greenhouse gas emissions.

Chancellor of the Exchequer Rishi Sunak, stated that the rule would be applied to the majority of the country’s economy, including banks, listed companies, insurers, large private businesses, regulated pension funds and asset managers. 

“We are starting a new chapter in the history of financial services and renewing the UK’s position as the world’s pre-eminent financial centre,” Mr. Sunak said. “By taking as many equivalence decisions as we can in the absence of clarity from the EU, we’re doing what’s right for the UK and providing firms with certainty and stability.”

The aim is that the groups report in alignment with the Task Force on Climate-related Financial Disclosures, an organisation established in 2015 by the international Financial Stability Board to promote more informed decisions by companies, by 2025.

The TCFD states that businesses would have to disclose in their financial reports how climate change could positive or negative affect their sales, among other issues. As of this year, over 1,500 organizations have expressed their support for the TCFD’s recommendations. This number is an 85% increase from the previous year, according to the TCFD’s status report published late last month. The report also stated that 42% of businesses with a market capitalization of more than $10 billion disclosed at least some information in line with the TCFD.

U.S. businessman and politician Michael Bloomberg happens to be the chairman of the TCFD. “Today’s news is the latest and biggest sign of how countries have embraced the concept, and we commend the U.K. for its leadership,” he said in an email. “Clearer data on the impacts of climate change will help countries world-wide build greener and more resilient economies in the wake of the pandemic.”

“Open, honest, consistent and transparent disclosure is a fundamental precondition for the realignment of finance and capitalism,” said Jenn-Hui Tan, global head of stewardship and sustainable investment at Fidelity International, commenting on the chancellor’s decision. The TCFD provides an essential platform for asset managers and companies alike to deliver this, Mr. Tan added.

The U.K.’s move comes just as regulators in the U.S. offer support for the TCFD. It was only last month that Linda Lacewell, the superintendent of the New York State Department of Financial Services, recommended that insurers and banks report via the TCFD

Just like the European Union, the UK has committed to a net-zero emissions goal by 2050. In order to meet this goal, Mr Sunak stated that the nation would issue its first green bond next year under its new climate change agenda, following in the footsteps of its European peers.  The capital raised by the green bond would be earmarked for environmental and climate projects. 

Back in early September, Germany raised 6.5 billion euros ($7.12 billion) through its maiden green bond. The Eurozone’s green sovereign bond market, which the UK is currently excluded from is still relatively small, accounting for less than 1% of the region’s overall bond market, however, it has been expanding since France’s debut green bond back in January 2017. 

As reported by the Wall Street Journal 

Related Posts

BreakingBoundaries
The most important scientific discovery of our time: NetFlix

Netflix states that the film, just released, centres around David Attenborough and Swedish Professor Johan Rockström’s research and records “the most important scientific discovery of our time.

Read More
climaterulings
4 Massive Climate Rulings Prove that Big Oil, Gas & Coal Are Running Out Of Hiding Places

3 global fossil fuel giants have been on the end of embarrassing rebukes over their inaction or inadequate action on …

Read More
net_zero_carbon
New IEA report gives meaning to Net Zero – five key insights

The IEA has released its long-awaited roadmap highlighting how the globe’s energy sector could slash its planet-heating emissions to net zero in 30 years

Read More
Methane emissions
Lowering Methane Emissions Is The Fastest Way To Slow Global Heating- UN Report

The new UN report discovered that methane emissions can be halved by 2030 with existing technology and at a reasonable cost. A large proportion of the actions involved will actually make money

Read More
netzero
Increasing Climate Change Promises are Moving the Needle

Recent and increasing promises concerning climate change made by major countries could bring the earth a fraction closer to the possibility of a more stable climate.

Read More
yosemite
Shocking results for nature’s climate change resilience – Retracing a century old wild life survey

When Berkely researchers following in the steps of Joseph Grinnell, a biologist who over a century ago developed a pioneering …

Read More
ironmanvsclimatechange
Tech billionaires’ Ironman approach to climate change vs. planting trees

3 of the 5 richest individuals in the world, are all aiming to create new technologies which can lower the world’s carbon emissions and fight climate change. What are the options?

Read More
climateaction 100plus
World First Net Zero Company Benchmark of the World’s Largest Corporate Emitters

Climate Action 100+, a $54 trillion investor coalition, released a report that evaluated several companies’ climate change performance.

Read More
why do we need to conserve resources
74% of Economists Says Net Zero Actions are Economically Desirable

The majority of the international climate economists polled in February stated they had become increasingly concerned about climate change over the past 5 years

Read More