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FCA extends climate-related disclosures to include standard listed companies and introduces new guidance

  • United Kingdom
  • Corporate
  • ESG - ESG Corporate
  • Financial services


The Financial Conduct Authority (FCA) has published the new rules for climate-related disclosures by companies with a standard listing of shares on the London Stock Exchange. The measures are part of the UK Government’s plan to introduce TCFD-aligned disclosures across the economy by 2025, as part of the UK’s wider net zero commitment.

The rules are broadly as consulted on in June 2021 (see our briefing here) and mirror the rules for premium listed companies, but with a change to the scope of companies that are subject to the new rules. In response to feedback, the FCA has extended the scope of the new rule to standard listed issuers of global depositary receipts (GDRs) and shares other than equity shares, as well as issuers of standard listed equity shares as originally proposed. Standard listed investment entities and shell companies (including SPACs) are excluded.

Disclosures required

In-scope companies will have to include a statement in their annual financial report setting out:

  • whether they have made disclosures consistent with the Taskforce on Climate-related Financial Disclosures (TCFD) recommendations and recommended disclosures in their annual financial report;
  • where they have not made disclosures consistent with some, or all, of the TCFD’s recommendations and/or recommended disclosures, an explanation of why, and a description of any steps they are taking or plan to take to be able to make consistent disclosures in the future, and the timeframe within which they expect to be able to make those disclosures;
  • where they have included some, or all, of their disclosures against the TCFD’s recommendations and/or recommended disclosures in a document other than their annual financial report, an explanation of why; and
  • where in their annual financial report (or other relevant document) the various disclosures can be found.

New guidance provisions and other matters covered

The FCA has also introduced new guidance provisions as follows:

  • Incorporating references to the TCFD’s new guidance on metrics, targets and transition plans and the updated implementation annex that were published by the TCFD in October 2021 in both the existing and new guidance provisions for both premium and standard listed issuers in scope of the FCA’s Listing Rules.
  • An additional guidance provision related to the TCFD’s finalised guidance on transition plans. Specifically, it sets out that, where making disclosures on transition plans as part of its strategy disclosures under the TCFD’s recommendations and recommended disclosures, a listed company that is headquartered in, or operates in, a country that has made a commitment to a net zero economy (such as the UK) is encouraged to assess the extent to which it has considered that commitment in developing and disclosing its transition plan. Where it has not done so, it is encouraged to explain why.

For both premium and listed issuers, the above guidance provisions will apply for financial periods commencing on or after 1 January 2022. As such, the guidance will not apply for disclosures made in 2022 for premium listed commercial companies’ current reporting periods. However, the FCA notes that premium listed companies may consider the new and amended guidance provisions earlier on a voluntary basis.

In addition, the FCA:

  • Encourages listed companies to consider the Sustainability Accounting Standards Board metrics when making TCFD aligned disclosures.
  • Has confirmed that TCFD disclosures for both premium and standard listed companies will remain on a “comply or explain” basis.
  • Has also updated the Technical Note published in December 2020, which clarifies existing disclosure obligations in relation to ESG matters, to include reference to the new rules and guidance.
  • Confirms that it does not intend to mandate audit or assurance requirements for TCFD disclosures at this stage. However, this is likely to be required in the future to support the reliability of climate-related disclosures.

Next steps

The new rules for standard listed companies will apply to accounting periods commencing on or after 1 January 2022, so companies that will be directly impacted should familiarise themselves with the rules and guidance. The first annual reports containing such disclosures will be published in early 2023.

Premium listed companies should also consider the implications of new and amended guidance provisions which will apply for accounting periods beginning on or after 1 January 2022.

The FCA expects that the climate-related disclosure rules will be updated in due course to reflect the reporting standards being developed by the International Sustainability Standards Board once these are endorsed for use in the UK.

Useful links

FCA Policy Statement PS21/21 Enhancing climate-related disclosures by standard listed companies

FCA news story