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Oct 10, 2023

FCA welcomes adoption of TPT climate disclosure framework

Framework designed to be consistent with IFRS S2

The Financial Conduct Authority (FCA) has welcomed the adoption of the Transition Plan Taskforce (TPT) Disclosure Framework, which provides good practice recommendations on climate disclosures for listed and regulated companies in the UK.

The guidelines were first announced at COP26 in 2021 and form part of the UK’s plan to become a net-zero financial center. The framework is designed to be consistent with the International Sustainability Standards Board’s (ISSB) standards and builds on the work of IFRS S2.

The UK regulator said in August that it would start consultations on what it expects from companies because of the TPT launch, with a view to aligning its guidelines with the ISSB standards.

The TPT framework recommends disclosure of a company’s strategic climate ambition and how this can impact its governance and accountability arrangements, as well as financial plans. This in turn aims to help investors be better equipped to assess a company’s prospects.

Think strategically

‘Companies will need to think strategically about how they respond and contribute to the transition to a low-emission, climate-resilient future,’ says Sacha Sadan, director of ESG at the FCA.

‘The framework is an important step in this transformation. It will help companies communicate high-quality, consistent and comprehensive information on their transition plans to investors, giving them the confidence to finance the transition.

‘The FCA has supported this work since its inception and we are committed to consulting next year on new regulatory expectations in this area that draw on the TPT’s outputs. In the meantime, we encourage listed companies and regulated firms to engage early with the framework and get started.’