UK Listing Rules push for TCFD compliance

ESG data quality will get a much-needed boost after the UK's securities regulator, the Financial Conduct Authority (FCA) published proposals for improved climate-related disclosures for UK listed companies. If adopted, all premium-listed commercial companies will be required to make TCFD-compliant disclosures on a comply or explain basis.

FCA's consultation comes at an important time for the development of sustainability reporting and investment integration. Investors are expressing increased alarm over the variability in quality of disclosures. As Minerva has previously noted in its "Say on Sustainability" research, data quality is a major stumbling block for the development of sustainability and a core investment strategy.

With over 2,000 high quality ESG data points covering covering 70% global market cap, Minerva offers the most comprehensive and independent resource for ESG-integrated stewardship. Find out how Minerva's fully integrated TCFD research and voting guidelines can support your sustainable stewardship program. Say hello@minerva.info

Commenting on the launch of the consultation, Andrew Bailey, FCA Chief Executive, said: 'Climate change presents a serious and wide-ranging threat to global economic prospects, society more broadly and our natural environment.

'The changes we propose will help to provide the transparency the market needs to be able to assess how well companies are adjusting to the risks of climate change. Improved disclosures will support better asset pricing and enable investors to make more informed choices about where to allocate their capital – which will ultimately support the transition to a low carbon economy.'

More guidance expected

Alongside the FCA consultation, the Climate Financial Risk Forum – a joint initiative between the FCA and the Bank of England’s Prudential Regulation Authority launched in March last year – will help to build disclosure capabilities. Industry guidance, covering climate-related disclosures, risk management, scenario analysis and innovation are expected to be published shortly. TCFD’s recommendations provide the basis for the guidance and will complement the proposed new rule.

Issuers are not the only focus for the FCA. As part of the UK Government's Green Finance Strategy the FCA is working closely with other regulators including the Treasury and Dept BEIS to ensure a coordinated approach including how best to improve climate-related disclosures from asset managers and life insurers.

The consultation closes on 5 June 2020.

What is does TCFD recommend?

The TCFD’s recommendations, published in 2017, provide a framework for companies to disclose how climate-related risks and opportunities could impact their businesses.  The recommendations are supported by a set of 11 recommended disclosures, in the areas of governance, strategy, risk management and metrics and targets. 

Minerva - Supporting TCFD

Minerva's sustainability research, launched in 2015, is fully aligned with the TCFD recommendations and is embedded across our full range of services including voting guidelines, remuneration and governance research, stock lending management and sustainable fund benchmarking. Bespoke data feeds are offered in a variety of formats, and in partnership with Solactive we support bespoke index and benchmark creation

Minerva has been a listed TCFD supporter since August 2018.

To find out more say hello@minerva.info