From 6th April 2022, over 1,300 of the largest UK-registered companies and financial institutions will have to disclose climate-related financial information in line with recommendations from the Task Force on Climate-Related Financial Disclosures (TCFD).
TCFD will apply to the following companies:
• All UK companies that are currently required to produce a non-financial information statement: UK companies that have more than 500 employees and have either transferable securities admitted to trading on a UK regulated market (such as the LSE’s main market), or are banking companies or insurance companies;
• UK AIM companies with more than 500 employees;
• UK companies not included in the categories above and have more than 500 employees and a turnover of more than £500m;
• LLPs which have more than 500 employees and a turnover of more than £500m.
TCFD has been put in place to help investors and businesses understand the financial impacts of their exposure to climate change, and price climate-related risks more accurately whilst helping tackle greenwashing, which leads to companies overstating environmental credentials, as well as understating risks.
The UK Government will publish guidance to help companies comply with the new disclosure requirement in due course. This is expected to cover topics including governance, risk management, environmental impact and analysis and reporting against set targets of an organisations environmental contributions.
This will have an effect on qualifying businesses, as planning and reporting mechanisms will need to be in place, to ensure they comply. There will also be opportunities for businesses to improve brand reputation and access to finance, as both consumers and investors are becoming increasingly interested in sustainability credentials.
ECA Business Energy experts are on hand to provide guidance and advice to qualifying businesses. Contact us today to see how we can help.