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U.K.’s Labour Says Company Climate Reporting Should Be Mandatory

U.K.’s Labour Says Company Climate Reporting Should Be Mandatory

  • Party calls for compulsory climate risk audits by 2021
  • BOE has indicated that TCFD rules will become obligatory
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Photographer: Chris Ratcliffe/Bloomberg

The U.K.’s main opposition political party wants all listed companies to be forced to report on their exposure to climate-change risks by this time next year.

The U.K. government has already signaled that it expects all public companies and large asset owners to sign up to the Task Force on Climate-related Financial Disclosures guidelines by 2022. But the reporting guidelines are currently voluntary.

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In a letter to U.K. Business Secretary Alok Sharma, Labour’s finance and climate spokesmen Wes Streeting and Matthew Pennycook said that as host of the next round of global climate change talks, known as COP26, the U.K. should lead the way and become the first country in the world to fully implement mandatory climate change-related financial reporting.

New Zealand has already announced plans for mandatory reporting but that won’t be implemented until 2023. Other countries including Canada, Australia, France, Japan and the European Union are looking at similar plans.

Former Bank of England Governor Mark Carney last week said he was working to make it mandatory for companies globally to disclose their exposure to climate risks by COP26 in November 2021. He’s currently advising British Prime Minister Boris Johnson on climate finance for the global event.

Sarah Breeden, the Bank of England’s executive sponsor for work on climate change, also said last week that she expected TCFD guidelines to become mandatory.

In the letter to Sharma the lawmakers called for mandatory reporting for all listed companies to be brought into force for the 2021-22 reporting year.

“Given that the City of London, as the world’s leading financial center, is home to companies and financial institutions that together are responsible for approximately 15% of global emissions, it can fundamentally shape the global response to this global threat,” they said.

Michael Bloomberg, founder and majority owner of Bloomberg News and its parent company Bloomberg LP, is chair of the TCFD.