Shearman & Sterling LLP | FinReg | FCA Publishes Policy Statements on Climate-Related Disclosures for Standard Listed Companies and FCA-Regulated Firms
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  • FCA Publishes Policy Statements on Climate-Related Disclosures for Standard Listed Companies and FCA-Regulated Firms

    The FCA has published two policy statements introducing new rules and guidance on climate-related disclosures for standard listed issuers and certain other FCA-regulated firms. The Policy Statements mirror the rule imposed under the FCA's Policy Statement on climate-related disclosures for premium listed issuers.

    The first Policy Statement, PS21/23, applies to commercial companies with a standard listing that issue equity shares, non-equity shares, and global depository receipts representing equity shares. The new rule, which will apply for accounting periods beginning on or after January 1, 2022, will require in-scope companies to include a statement in their annual financial report confirming whether their report includes disclosures consistent with the Task Force on Climate-Related Financial Disclosures' recommendations and if they have not done so, explain why not. The first financial reports containing these disclosures are expected to be published in 2023. The Policy Statement also issues an updated Technical Note 801.2, which offers clarification on the ESG disclosure obligations.

    The second Policy Statement, PS21/24, applies to fund and asset managers (firms conducting portfolio management, managers of UCITS and managers of AIFs), life insurers, including reinsurers, providing insurance-based investment products and defined contribution pension products and FCA-regulated pension providers. The FCA is introducing a new ESG sourcebook, which will require these firms to publish prominent statements annually on their websites regarding how they, as a firm, take account of climate-related risks in their management of assets (called a TCFD entity report) and on certain climate-related metrics for their products and portfolios (called a public TCFD product report). The new rules will apply from January 1, 2022, for the largest firms and January 1, 2023, for smaller qualifying firms. Firms with assets under management of less than £5bn will not be caught by the rules. The first public disclosures must be made by June 30, 2023; subsequent disclosures must be made by June 30 each year.

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