PS21/23: Enhancing climate-related disclosures by standard listed companies

Read PS21/23 (PDF)

What we are changing 

High-quality information on companies’ exposure to climate-related risks and opportunities will support more accurate asset pricing and better management of climate-related risks and opportunities, underpinning more efficient capital allocation in the transition to a net zero economy. 

Who this applies to 

Our final rule will directly affect issuers of standard listed shares – both equity shares, and shares other than equity shares – and standard listed issuers of Global Depositary Receipts (in each case excluding listed investment entities and shell companies). We also set out considerations relevant to issuers of standard listed debt and debt-like securities.

Our finalised handbook guidance also incorporates new and updated guidance materials from the TCFD. These materials have been referenced in guidance relating to both the existing and new rules, so also affect premium listed commercial companies.

This PS will also be of interest to other stakeholders, including:

• corporate finance and other advisers
• consumer groups and individual consumers
• investors and asset owners
• sponsors of listed companies
• accountants and auditors 
• industry groups, trade bodies and civil society groups
• regulated firms
• policymakers and regulatory bodies
• industry experts and commentators
• academics and think tanks

Background to climate-related corporate disclosures  

We took our first step to introduce climate-related disclosure requirements in December 2020, introducing a Listing Rule for premium listed commercial companies referencing the TCFD’s recommendations. The rule we are finalising in this PS extends the application of the existing Listing Rule to a wider scope of listed issuers.

Our final rule and guidance form part of a broader strategic aim to promote transparency on climate change and wider sustainability matters along the value chain. 

Our work supports the UK’s commitment to introduce mandatory TCFD-aligned disclosure obligations across the UK economy by 2025. In finalising our rules, we have also had regard to the Government’s net zero commitment, in line with Government expectations. 

Next steps 

Our new rule will apply for accounting periods beginning on or after 1 January 2022. So, the first annual financial reports subject to the new rule will be published in early 2023.

Listed issuers directly affected by the new LR should familiarise themselves with the rule and associated guidance. They need to assess the suitability of their current arrangements to ensure they can meet the requirements of the rule.

Premium listed issuers in scope of LR 9.8.6R(8) should also consider the implications of both the new and amended guidance provisions which will apply to disclosures for accounting periods beginning on or after 1 January 2022.