Legal & Regulatory News

UK's Financial Conduct Authority releases policy statement on climate-related disclosures for asset managers, life insurers and regulated pension providers

On 17 December 2021, the UK's Financial Conduct Authority (FCA) published its policy statement (PS21/24) on improving climate-related disclosures made by asset managers, life insurers and FCA-regulated pension providers. Amongst other things, PS21/24 summarises the feedback that the FCA received in relation to the its previous consultation paper (CP21/17) on proposals for asset managers, life insurers and FCA-regulated pension providers to make climate-related disclosures consistent with the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD), which was published in June 2021.

Taking into account this feedback, PS21/24 confirms that the FCA will introduce a new ESG Sourcebook to the FCA Handbook containing rules and guidance for asset managers and certain FCA-regulated asset owners to make disclosures consistent with the TCFD’s recommendations. The rules will require in-scope firms to make disclosures on an annual basis at:

• an entity-level – an annual TCFD entity report will be required to be published in a prominent place on the main website of the firm’s business setting out how they take climate-related matters into account in managing or administering investments on behalf of clients and consumers.
• a product-level – disclosures (including a core set of climate-related metrics) on the firm’s products and portfolios will need to be made publicly in a prominent place on the main website of the firm’s business and included or cross-referenced in an appropriate client communication, or made upon request to certain eligible institutional clients

The rules are accompanied by guidance to help firms determine whether their disclosures are consistent with the TCFD’s recommendations and recommended disclosures, and/or our requirements.

The FCA's requirements will be implemented in a phased approach, with the rules applying to the largest in-scope firms from 1 January 2022 and firms above the £5bn threshold from 1 January 2023. Initial public disclosures will need to be made by 30 June 2023.

Click here to read the press release.

Click here to access PS21/24.