Wednesday, December 1, 2021

UK forces big companies to disclose climate-related risks

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The government has announced that starting next year, large companies will be legally required to share climate-related financial information.

Ministers said the UK was the first country in the G20 to make such disclosures mandatory.

The rule, which comes into force on April 6, only applies to around 1,300 companies registered in the UK, including banks and insurance companies, as well as private companies with more than 500 employees and annual sales of £ 500 million.

Some companies, including Aviva, Tesco and Unilever, are already voluntarily providing the information required by the new law.

The decision to force others to do the same comes at the recommendation of the Task Force on Climate-Related Financial Disclosures, a group formed at the 2015 Paris Climate Summit.

It is to be hoped that policymakers will raise awareness among investors and encourage companies to become more environmentally friendly.

The announcement comes two days before the start of the Cop26 climate conference in Glasgow and follows the publication of the UK’s Net Zero strategy.

Announcing the bill, Climate Change Secretary Greg Hands said the UK needs the financial sector to “put climate change at the center of its activities and decision-making”.

He added that the government was determined to make the UK financial system “the greenest in the world”.

Flora Hamilton, Head of Financial Services at the Confederation of British Industry (CBI), welcomed the new framework.

“Increased transparency and better comparability of corporate sustainability performance will be the key to allocating more money to sustainable projects across the economy,” she said.

Despite their green pledges, climate activists believe Boris Johnson’s administration is not doing enough to tackle climate change. At the beginning of this week, Chancellor Rishi Sunak lowered the tariffs for passengers on domestic flights, which was sharply condemned by environmental groups.

Rebecca Newsom, Head of Policy at Greenpeace UK, said: “The climate emergency should have been the centerpiece of this spending review ahead of the UK’s most critical climate talks in years, but Sunak spent more time discussing the domestic cider obligation . ”

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