On June 22, the FCA released CP21/17 setting out its proposals to introduce climate-related financial disclosure rules and guidance for asset managers and other FCA’s regulated entities, consistent with the Task Force on Climate-related Financial Disclosure (TCFD) recommendations (covering governance, strategy (including scenario analysis), risk management and metrics and targets) and recommended disclosures.
Some of the key requirements that will be applicable to asset managers include:
Entity-level disclosure requirements: Requiring annual disclosures by firms on how they take care of their climate-related risks and opportunities when managing or administering assets on behalf of their clients and consumers. Disclosures that must be made on their main website.
This would help clients and consumers understand firms’ approach to climate-related risks and opportunities.
Product or portfolio-level disclosure requirements: Requiring annual disclosures in respect of the individual products or portfolio management services offered by firms. The disclosures must be done on their website, in appropriate client communications or upon client request where applicable.
The proposals would apply to FCA-regulated firms such portfolio managers, UK UCITS management companies, full-scope UK AIFMs, small authorised UK AIFMs.
The deadline for comments is 10 September 2021.