The Financial Conduct Authority (FCA) recently published a Policy Statement (PS20/17) and final rules and guidance in relation to climate-related financial disclosures for UK premium listed companies.

Companies will be required to include a statement in their annual financial report which sets out whether their disclosures are consistent with theTask Force on Climate-related Financial Disclosures (TCFD) June 2017 recommendations and, if not, to explain why they have not done so. The rule applies for accounting periods beginning on or after 1 January 2021.

The FCA also added some additional guidance:

  • Timeframe for future compliance – Where companies are explaining why they have not made disclosures consistent with the TCFD recommendations, the final rules state that they must explain any steps they are taking or plan to take in order to be able to make the disclosures in the future, and the timeframe within which they expect to be able to make those disclosures.
  • Level of detail required – The FCA has added additional guidance on the limited circumstances in which it would expect issuers to explain rather than disclose – where they face “transitional challenges” – and in relation to the level of detail to be included in companies’ disclosures. It expects all companies will “ordinarily be able” to make TCFD consistent disclosures on governance and risk management.
  • References to TCFD materials – The FCA has added guidance to clarify that a company’s determination of consistency with the TCFD’s recommendations should be informed by a detailed assessment of their disclosures which takes into account certain specified TCFD materials.

In addition, the FCA issued a Technical Note clarifying existing environmental, social and governance (ESG) disclosure obligations in its existing rules and confirmed that it plans to publish further consultation papers on extending the application of TCFD disclosures to a wider scope of listed issuers, and possibly strengthening the compliance basis, in early 2021.

This reflects the intention outlined by the Treasury in its interim report published in Novermeber last year in which it indicated that it wants to make TCFD-aligned disclosures mandatory for the following entities by 2025 (with a significant proportion of mandatory requirements being in place by 2023):

  • listed commercial companies
  • UK-registered large private companies
  • banks and building societies
  • insurance companies
  • asset managers
  • life insurers and FCA-regulated pension schemes, and
  • occupational pension schemes.

The roadmap includes the DWP’s proposed timetable for the introduction of enhanced reporting duties for large occupational pension schemes, master trusts and CDC schemes, which will be phased in (based on a scheme’s size) from 2021 onwards.

For a more detailed analysis of the FCA’s Policy Statement, see our banking litigation blog post and our corporate blog post.


The FCA’s new rules are another step on the road towards mandatory TCFD disclosures for premium listed companies. As more information is dislcosed by such companies (along with other entities) it will make it easier for trustees of occupational pension schemes and pension providers to assess the climate-related risks and opportunities to which they are exposed and to assess and monitor the climate-related impact of their investment portfolios.