ESG investment / fotopoly

As investors demand greater disclosure of climate-related risks, the U.K.’s Financial Conduct Authority (FCA) is proposing new requirements for asset managers, pensions and insurers, as well as listed companies.

On Tuesday, the FCA published a pair of new consultation papers, including the first set of policy proposals for the asset management sector, which aim to enhance climate-related disclosures that are aligned with the recommendations of the Taskforce on Climate-related Financial Disclosures.

“The proposed rules are designed to help make sure that the right information on climate-related risks and opportunities is available along the investment chain – from companies in the real economy, to financial services firms, to clients and consumers,” the FCA said in a release.

Alongside the consultation on requirements for asset managers (which also includes insurers and pensions), the FCA issued proposals for listed companies that would apply the requirements for “premium-listed” companies to issuers of standard equity shares.

“Managing the risks of climate change and transitioning to a cleaner and less carbon-intensive economy will require high quality information on how climate-related risks and opportunities are being managed throughout the investment chain,” said Sheldon Mills, executive director of consumer and competition at the FCA, in a statement.

“However, climate-related disclosures do not yet meet investors’ and market participants’ needs. The new rules will help markets, investors and ultimately consumers better understand the impact of climate change and make more informed decisions,” Mills added.

The FCA said it’s also seeking input on other ESG issues in the capital markets, including feedback on green and sustainable debt markets, and the increasingly prominent role of ESG data and rating providers.

The deadline for the consultations is Sept 10.

The FCA intends to finalize its policy on climate-related disclosures by the end of 2021, and to address the broader ESG issues in the first half of 2022.