Learn about our TCFD-aligned reporting requirements, the companies and firms that fall in scope of the rules, and our plans to move towards new global standards.
Financial markets rely on high-quality and comparable sustainability disclosures to inform asset pricing and capital allocation. Financial institutions, including asset managers, banks, insurers and pension providers, also need reliable data on sustainability factors to build products that meet their clients' and consumers' needs, as well as for their own investment and risk management processes.
That's why one of our priorities is to promote climate and wider sustainability-related financial disclosures right along the investment chain, from listed companies, to market participants, and to the end investors.
TCFD-aligned reporting requirements currently apply to listed companies, asset managers and FCA-regulated asset owners.
In 2025, we intend to consult on changing requirements for listed companies to refer to new reporting standards developed by the International Sustainability Standards Board (ISSB) and Transition Plan Taskforce (TPT). This is subject to the Government finalising its endorsement of the ISSB standards. Below you can find out more about the key milestones and the TCFD, ISSB, and TPT.
Summary timeline
Our plans to move to new reporting standards
As we set out in Primary Market Bulletin 45[12], following the publication of the final ISSB standards, jurisdictions need to consider how to reference the standards in their legal and regulatory frameworks. The Secretary of State for Business and Trade will be responsible for a decision to endorse the standards in the UK.
Two advisory committees – the Policy and Implementation Committee and the Technical Advisory Committee – support the Secretary of State's decision making on endorsement and coordinate the implementation of reporting requirements by the Government and the FCA. We contribute to this process as a member of the Policy and Implementation Committee.
International Sustainability Standards Board (ISSB)
In November 2021, the trustees of the IFRS Foundation announced the formation of the International Sustainability Standards Board (ISSB), which would develop a comprehensive global baseline of sustainability disclosure standards to meet the information needs of investors and financial markets.
The ISSB published its first 2 IFRS Sustainability Disclosure Standards (ISSB standards) on 26 June 2023:
- IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information[14] requires an entity to disclose information about all sustainability-related risks and opportunities that could reasonably be expected to affect the entity's prospects.
- IFRS S2 Climate-related Disclosures[15] requires an entity to disclose information about its climate-related risks and opportunities that could reasonably be expected to affect the entity's prospects.
The ISSB builds on the work of market-led investor-focused reporting initiatives, including the TCFD. The ISSB has said that the requirements in IFRS S2 are consistent with the 4 core recommendations and 11 recommended disclosures published by the TCFD, and using the TCFD recommendations is a good entry point for companies as they move to use the ISSB Standards.
In July 2023, the FSB announced that the work of the TCFD had been completed, with the ISSB Standards marking the 'culmination of the work of the TCFD'. Having fulfilled its remit, the TCFD disbanded in October 2023.
The IFRS Foundation has now taken over responsibility for monitoring progress on companies' climate-related disclosures from the TCFD.
Transition Plan Taskforce (TPT)
The IFRS Foundation defines a climate-related transition plan as an aspect of an entity's overall strategy that lays out the entity's targets, actions or resources for its transition towards a lower-carbon economy. This includes actions such as reducing its greenhouse gas emissions.
The TPT was commissioned by the Treasury in 2022 to develop a best practice framework for private sector climate transition plans. The TPT published its final Disclosure Framework and Implementation Guidance in October 2023.
The TPT Disclosure Framework (PDF)[16] provides a set of good practice recommendations to help companies across the economy make high quality, consistent and comparable transition plan disclosures. It recommends disclosure of a company’s strategic ambition, and how this is reflected in its:
- implementation and engagement approaches
- governance and accountability arrangements
- financial plans
With such information, investors are better equipped to assess companies' future prospects.
IFRS S2 includes a requirement to make disclosures that relate to transition planning. The TPT Framework was designed to work with IFRS S2 and help companies report their transition plan-related disclosure provisions more effectively.
In June 2024, the IFRS Foundation announced[17] that it would assume responsibility for the disclosure-specific materials developed by the TPT and would use these materials to develop IFRS educational materials. The TPT materials can now be found on the IFRS Foundation's website[18].
