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UK’s mandatory TCFD roadmap announced

Abdul Kamara Policy Adviser

As we look forward towards COP26 in Glasgow next year, the Chancellor Rishi Sunak, outlined key steps that the UK financial sectors will take in order to extend the UK’s global leadership in green finance and financial technology.

11 Nov 2020, 2 min read

The Chancellor announced that the UK will issue its first Sovereign Green Bond in 2021 subject to market conditions. This announcement comes after growing demand from the investment community for more investment tools that will help the UK reach net-zero by 2050.

Additionally, the UK will become the first country in the world to make Task Force on Climate-related Financial Disclosures (TCFD) aligned disclosures fully mandatory across the economy by 2025. From 1 January, the Financial Conduct Authority, will be introducing the rule that will require premium listed companies to make better disclosures on the affects of climate change on their business.

The UK will also introduce a taxonomy that will use the EU’s taxonomy metrics as a basis and will come alongside the establishment of a Green Technical Advisory Group that will review these metrics to ensure they are right for the UK.

Keeping the UK at the forefront of technological innovation

The Chancellor announced that the UK will look to introduce innovative technologies such as stablecoins, which are privately-issued digital currencies, more broadly. This is one of the tools the UK will use to help keep the UK at the forefront of technological innovation.

Alongside these major announcements, the Chancellor outlined that the government will be publishing a guidance document to the UK’s approach to equivalence, a taskforce that will propose reforms to the UK’s listings regime, a Call for Evidence on the UK’s overseas regime and a consultation on reforming the UK’s funds regime.

The financial sector will have a critical role to play on the way to reaching net-zero

Tackling climate change through the UK’s world-renowned financial services sector – while boosting competitiveness - matters hugely for our economy.

Reaching an agreement with the EU is of critical importance. It will help businesses prepare and catalyse confidence by making outstanding issues, including data adequacy and regulatory equivalence, easier to resolve.

Leading the way on sustainable finance initiatives, like green gilts, can drive progress towards net zero, helping fuel a sustainable recovery. And active dialogue between enterprise and government can ensure smarter regulation - meeting the highest standards - along with new reporting requirements underline the UK’s status as a place to invest.