UK's Climate Disclosure Mandate: Driving Corporate Action
The climate-related financial disclosure aims to support the UK's transition to a low-carbon economy and drive corporate action on climate change. Disclosures to be included in annual reports from 2022 for premium listed companies and from 2023 for other in-scope entities.
Types of firms impacted
- All UK companies with >500 employees and have either transferable securities admitted to trading on a UK regulated market or are banking companies or insurance companies
- UK registered companies with securities admitted to AIM with more than 500 employees
- UK registered companies not included in the categories above, which have more than 500 employees and a turnover of more than £500m
- Large LLPs, not traded or banking LLPs, and >500 employees and a turnover >£500m and; Traded or banking LLPs with >500 employees.
Key actions to comply
- Review business operations and assets to identify and assess material climate-related risks and opportunities over short, medium and long term.
- Develop policies, governance processes and risk management systems to manage climate risks and incorporate into overall risk management.
- Define and monitor metrics to assess climate risks and performance such as GHG emissions, energy usage, water usage etc. Set climate-related targets.
- Conduct scenario analysis to determine business resilience against climate scenarios e.g. 2°C global warming. Assess financial impacts.
- Embed climate considerations into financial planning and strategic decision making at board and senior management level.
- Disclose climate governance, risk management, targets and metrics, scenario analysis in annual report per TCFD recommendations.
- Ensure climate disclosures are clear, accurate and consistent from year to year. Subject disclosures to appropriate controls and assurance.
- Train board, management and staff on climate risks and the need for disclosures. Ensure adequate resources.
- Seek specialist advice on measuring and disclosing climate risks if needed. Leverage industry frameworks.
- Consider obtaining independent assurance over climate disclosures.
- Review disclosures made by peers to benchmark practices.
- Monitor regulatory updates and engage with authorities if required on new expectations.
What needs to be reported?
- Total energy consumptionfrom various sources such as electricity, gas, and fuel.
- Greenhouse gas (GHG) emissionsassociated with energy use, calculated in tonnes of CO2 equivalent.
- Intensity ratio, which measures GHG emissions per unit of turnover or output.
- Description of energy efficiency measures taken during the year.
- All UK companies with >500 employees and have either transferable securities admitted to trading on a UK regulated market or are banking companies or insurance companies
- UK registered companies with securities admitted to AIM with more than 500 employees
- UK registered companies not included in the categories above, which have more than 500 employees and a turnover of more than £500m
- Large LLPs, not traded or banking LLPs, and >500 employees and a turnover >£500m and; Traded or banking LLPs with >500 employees.
- Review business operations and assets to identify and assess material climate-related risks and opportunities over short, medium and long term.
- Develop policies, governance processes and risk management systems to manage climate risks and incorporate into overall risk management.
- Define and monitor metrics to assess climate risks and performance such as GHG emissions, energy usage, water usage etc. Set climate-related targets.
- Conduct scenario analysis to determine business resilience against climate scenarios e.g. 2°C global warming. Assess financial impacts.
- Embed climate considerations into financial planning and strategic decision making at board and senior management level.
- Disclose climate governance, risk management, targets and metrics, scenario analysis in annual report per TCFD recommendations.
- Ensure climate disclosures are clear, accurate and consistent from year to year. Subject disclosures to appropriate controls and assurance.
- Train board, management and staff on climate risks and the need for disclosures. Ensure adequate resources.
- Seek specialist advice on measuring and disclosing climate risks if needed. Leverage industry frameworks.
- Consider obtaining independent assurance over climate disclosures.
- Review disclosures made by peers to benchmark practices.
- Monitor regulatory updates and engage with authorities if required on new expectations.
- Total energy consumptionfrom various sources such as electricity, gas, and fuel.
- Greenhouse gas (GHG) emissionsassociated with energy use, calculated in tonnes of CO2 equivalent.
- Intensity ratio, which measures GHG emissions per unit of turnover or output.
- Description of energy efficiency measures taken during the year.
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