The TCFD, established in 2015 by the Financial Stability Board, was tasked with reviewing how the global financial sector could take account of and disclose climate-related issues. In 2017, the TCFD published a report which set out the core elements of recommended climate-related financial disclosures that apply to organisations across sectors and jurisdictions. It is already mandatory for entities with a premium or standard listing on the main market of the London Stock Exchange to report in accordance with the TCFD framework.
Focusing on the UK, many organisations already provide some level of voluntary climate-related disclosure in their annual reports. To support better information and consistency, the former Department for Business, Energy and Industrial Strategy (BEIS) introduced The Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022 and the Limited Liability Partnerships (Climate-related Financial Disclosure) Regulations 2022 (together ‘the Regulations’) in the UK, which are based on the TCFD recommendations to help support informed investor decisions. We explore some frequently asked questions on how this will impact UK companies and LLPs.