FCA final rules on climate-related disclosures by asset managers

On 17 December 2021, the FCA published its long-awaited final rules, PS21/24 on climate-related disclosures by asset managers, life insurers and FCA-regulated pension providers (the Policy Statement). The Policy Statement summarises the feedback the FCA received to its Consultation Paper (CP21/17) from June and confirms the FCA’s final policy position on the implementation of a new climate-related disclosure regime for asset managers.

The new disclosure obligations will be based on recommendations published by the Task Force on Climate-related Financial Disclosures (TCFD).

The new rules represent a significant development in the UK ESG regulatory landscape and create material new obligations for groups with UK regulated asset management entities.

This briefing note summarises the top 10 things that asset managers need to know about the new rules:

1. What is the TCFD and what is the purpose of the new rules?

2. How will the FCA implement the TCFD Recommendations into the UK regulatory regime?

3. Which firms and products will be subject to the new rules?

4. Are non-UK firms going to be subject to the new rules?

5. When will the new rules come into force?

6. What disclosures must be included in the entity report?

7. What disclosures must be included in the product-level or portfolio-level report?

8. Is there a mandatory format for the reports?

9. Can firms rely on disclosures made in other documents or made by affiliates or delegates?

10. How do the UK proposals differ from the EU SFDR?

This note focuses on the elements of the consultation which are relevant to asset managers.

In a parallel Policy Statement, PS21/23, published on the same day, the FCA finalised its proposals on TCFD disclosures and standard listed equity shares issuers. See our summary of PS21/23 and its implications for listed issuers here.