U.K.’s Experiment With Climate Reporting Is Worth Watching: WSJ

November 17, 2020

WSJ_UK_Climate_Reporting_is_Worth_Watching

“Companies [in the U.K.] and money managers face new environmental requirements that could bring write-downs but also clarity on risks. From next year, many U.K. companies and funds will have to report how their assets and organizations will affect and be affected by global warming. The new rules...are in line with 2017 recommendations from the Task Force on Climate-related Financial Disclosures."

“The TFCD standards, to which the U.K. decision will lend weight, cover four main areas: governance, risk management, strategy and key metrics. While the disclosures are largely qualitative, their publication would likely push companies to incorporate climate risks into the financial numbers too. Big entities will need to comply first, followed by smaller ones over five years."

“By 2022, the U.K. government expects climate-risk reporting from all companies listed on the main market of the London Stock Exchange (excluding a high-growth submarket), half of its large private companies, 75% of U.K.-authorized asset managers and nearly all of its banks, insurers and large pension funds.” - Wall Street Journal