On 28th October 2021, the UK government’s Department for Business, Energy & Industrial Strategy (BEIS) confirmed that climate-related financial reporting will be mandatory for the UK’s largest businesses from April 2022, pending parliamentary approval, making the UK the first G20 country to enshrine TCFD-aligned disclosures in law. This new legislation follows the publication of the country’s Net Zero Strategy, and the government are hopeful that it will stabilise the transitioning economy while also encouraging companies to set out clear emission reduction plans.

From 6th April 2022, over 1,300 of the largest UK-registered companies and financial institutions will have to report on their climate-related risks and opportunities in line with the TCFD’s recommendations. This includes many of the UK’s largest traded companies, banks and insurers, as well as private companies with over 500 employees and £500 million in turnover. This is in addition to legislation introduced in January 2021 that requires UK premium listed companies to disclose climate-related financial information, and it is the UK government’s intention to make TCFD-aligned disclosures mandatory across the entire economy by 2025, with a significant portion of mandatory requirements in place by 2023. 

The TCFD recommends that the disclosures cover four main areas in respect to climate risks and opportunities: governance; strategy; risk management; and metrics and targets. They should also take into consideration different potential climate pathways, including a 2°C or lower scenario. This process might seem daunting to many; having to navigate your climate-related risks, strategies and targets and ensuring you comply with the novel UK legislation.

The Optimised Group’s TCFD service simplifies the reporting process by identifying gaps in your report and offering a range of services including net zero transition planning, carbon accounting and data management as well as guidance on target setting and science-based targets. We can then create your business’s report annually, in line with the mandatory framework.

To find out more about how the Optimised Group can help your business with climate-related financial disclosures, contact charlie.parker@optimisedenergy.com