The Financial Conduct Authority’s consultation paper (CP 20/3) on climate-related disclosures proposes that a new listing rule will take effect for financial accounting periods beginning on or after 1 January 2021.

There is a growing ground-swell around disclosure of all environmental, social and governance (“ESG”) related matters as issuers and investors become increasingly engaged with these issues. The FCA is not proposing to mandate disclosure at this point given that issuers’ reporting practices are still evolving, however this is an area of disclosure that will predictably only expand over time. Indeed, the FCA anticipates that all listed issuers will be disclosing in accordance with the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (“TCFD”) recommendations by 2022.

The proposed new Listing Rule will require premium listed companies to include a statement in their annual financial report setting out:

1. whether they have made disclosures consistent with the recommendations of the TCFD and recommended disclosures in their annual financial report

2. where they have:

   • not made disclosures consistent with some or all of the TCFD’s recommendations and/or recommended disclosures; or

   • included some or all of the disclosures in a document other than their annual financial report,

   • an explanation of why;

3. where in their annual financial report (or other relevant document) the various disclosures can be found.

Guidance on the proposed new disclosure requirements (through a draft new Technical Note) is also set out in the consultation paper.