Treasury publishes roadmap on new sustainability disclosures

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Chancellor Rishi Sunak has published a roadmap with details on the Sustainability Disclosure Requirements he announced earlier this year, which will apply to asset owners and managers as well as businesses.

The report, Greening Finance: A Roadmap to Sustainable Investing, comes ahead of the UK hosting COP26 next month and outlines the UK's legislative and regulatory changes on sustainability. It is part of a plan for the UK "to lead the world in green finance and sustainable investing", the Treasury said.

The rules will help businesses and consumers to have a better understanding of whether their investments are aligned with net zero, it added.

"We are already a world leader in green finance, and today’s roadmap will give us the opportunity to set new global standards for sustainability that will boost the economy, protect the planet and support our net zero goals," said Sunak.

First announced at the chancellor’s Mansion House speech at the start of July, the new integrated regime "will bring together and streamline existing climate reporting requirements – such as the UK’s commitment to implement mandatory reporting aligned with the Task Force on Climate-Related Financial Disclosures (TCFD) – and go further", according to the Treasury.

It includes requiring every investment product to set out the environmental impact of the activities it finances, and justify any sustainability claims it makes. Asset managers will also need to set out how they incorporate sustainability into their investment strategy to allow consumers to make informed judgements about the kind of firms they want to invest in. The Roadmap also sets out more details on the UK Green Taxonomy. 

The Treasury said that specific reporting requirements, including scope, timing and detail, will be developed following public consultation.

TPR urges industry to 'make a step change'


The Pensions Regulator has welcomed the roadmap's ambition to fill information gaps with new reporting requirements.

“A warming world, loss of biodiversity and depletion of the natural environment all have the potential to worsen retirements through supply disruption, loss of assets or weakening an employer’s ability to support pension scheme funding. A shift to sustainable investment and a net zero economy can also provide opportunities trustees must also be alert to," said David Fairs, executive director of regulatory policy, analysis and advice at TPR.

Fairs urged the pensions industry to up its pace on the matter. “The pensions industry must understand this issue is real and urgent. We need to make a step change to achieve a landscape of sustainable and resilient pension schemes where climate risk is managed and the opportunities from moving to a net zero economy are taken in the best interests of savers," he said.

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