The UK Government's Department for Energy Security & Net Zero has published a series of three consultations on proposals to help UK-regulated financial institutions and large companies to develop climate transition plans. The first consultation seeks views on proposals to implement climate-related transition plan requirements, including mandating that entities develop and disclose transition plans or explain why they have not disclosed a plan and making it a legal requirement to take steps in line with a transition plan. The consultation also considers the scope of companies that should be captured (with a focus on ensuring the requirements are proportionate and concentrate on economically significant entities).
The second consultation seeks views on exposure drafts of the UK Sustainability Reporting Standards (UK SRS) for making sustainability-related financial disclosures, which would be based on the IFRS S1 standards for disclosure of sustainability-related financial information and IFRS S2 climate-related disclosures. Under the proposals, reporting entities would disclose material information about sustainability-related risks and opportunities that might affect their financial position. The third consultation sets out proposals for regulatory oversight of third-party assurance services for sustainability reporting, with a newly established Audit, Reporting and Governance Authority (which would replace the Financial Reporting Council under separate proposals) to operate a voluntary registration regime. The regime would set out criteria for third-party firms to register and monitor their activities and offer quality assurance for sustainability-related financial disclosures, particularly those made in line with the UK SRS.
The deadline for comments on all three consultations is 17 September. The UK Government will consider responses to the consultations in parallel and bring forward a package of proposals taking account of the UK's regulatory landscape as a whole.
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