Treasury to make firms reveal their role in climate change
COMPANIES are going to be forced by the Treasury to report their impact on climate change, The Mail on Sunday can reveal.
A plan will be published in early October revealing which businesses will be affected, the information they will need to provide and the deadline.
The initiative, led by Chancellor Rishi Sunak, will come ahead of Cop26, the UN Climate Change conference in Glasgow, in November.
The move is also part of a strategy to make Britain the go-to venue globally for ‘green’ finance. It is understood the Treasury will bring in legislation to give regulators the power to force firms to report.
The Government said last November that it will be mandatory by 2025 for businesses to disclose the financial risks and opportunities they face from climate change.
A source close to the Treasury said: ‘We are now going further. These [requirements] will cover real-economy corporates, pension schemes, financial services firms and investment products and will require disclosures about the impact they are having on the climate and sustainability.’
But the source added the plan was to have ‘one streamlined regime for companies to report against’ so that businesses were not having to tackle numerous different reporting requirements.
Scott Knight, head of audit at accountants BDO, said: ‘Climate change is something investors are starting to take seriously and they’re going to want reliable and comparable information that has been assured by a third party.’
The Investment Association, representing professional fund managers, is looking to change the investment process so that stockpickers consider environmental, social and governance (ESG) risks when buying shares in a company.
One of the aims of the Government’s new reporting requirements will be to stamp out ‘greenwashing’, which is where companies tout themselves as environmentally-friendly without having the credentials.
It emerged last week that US and German regulators were investigating fund group DWS over claims by a former employee that it misled clients about its environmental and sustainable investing.
The company said in a statement: ‘We firmly reject the allegations. DWS will continue to remain a steadfast proponent of ESG investing as part of its fiduciary role on behalf of its clients.’