PRI criticises UK climate reporting proposal for ‘low ambition’

The BEIS’s consultation into climate-related financial disclosure for listed companies closed this week

The Principles for Responsible Investment (PRI) has criticised the UK Department for Business, Energy and Industrial Strategy’s (BEIS) corporate climate reporting proposal for being unambitious, and called for it to reconsider its plans.

The BEIS’s consultation into climate-related financial disclosure for listed companies closed this week. Proposing that large public and private companies report in line with the Task Force on Climate-related Financial Disclosure (TCFD) framework, the consultation was largely welcomed when it opened in March this year.

Sarah Woodfield, stewardship manager at the Investment Association, said: “This proposal is a crucial and welcome step forward as the UK looks to reach net zero by 2050 and achieve its ambition to be a global leader in sustainability. Investment managers have an important role to play as stewards in supporting companies transition to a more sustainable future.”

See also: – UK opens consultation into mandatory TCFD

However, the PRI said the proposal would undermine the quality and comparability of UK corporate climate-related disclosures and exclude climate scenario analysis by focusing too much on the four pillars of the TCFD rather than the 11 recommendations made by the Task Force itself.

In its submission to the consultation, the PRI said the BEIS should extend the scope of TCFD reporting to companies with 250 employees and/or a turnover of £36m per year.

It also said the proposal should require companies to disclose their net-zero transition plans, and be consistent with other UK climate reporting regulation.

PRI CEO Fiona Reynolds (pictured) said: “I am surprised and concerned by the low ambition set forth by the BEIS in its consultation on climate-related corporate reporting. A step-change in the quality and quantity of corporate reporting is urgently needed by investors to provide decision-useful information on how companies are positioning themselves in the net-zero transition.

“The UK has long pioneered and promoted a new approach to climate-related financial disclosure. The proposal for consultation set forth by BEIS on corporate disclosure are out of step with other reforms on climate-related financial disclosures and critically – would water down, rather than implement, the TCFD framework.”

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Natasha Turner

Natasha was global editor at ESG Clarity, part of Mark Allen Financial, and a financial journalist for seven years. She has been shortlisted for Story of the Year and Investment Journalist of the Year...