Wednesday 30 September 2020 / 10:52 AM Climate Change / Matthew Pennycook

Government must lead the way in greening the global financial system by implementing mandatory climate-related disclosure, says Labour

With momentum building across the world, the UK should become the first country in the world to fully implement mandatory climate change-related financial reporting, Labour has set out today. This would ensure that companies are measuring and managing the risks of climate change, that investors are fully informed when making decisions and are operating on a level-playing field, and that the UK shows global leadership ahead of hosting the crucial COP26 climate summit next year.

Mandating that information is published about how companies and financial institutions may be contributing to climate breakdown, and how their strategies would cope in different global warming scenarios, in line with the recommendations of the Task Force for Climate-related Financial Disclosures, will ensure that climate change and the task of meeting net zero can be factored into every single investment decision.

Given that the City of London, the world’s leading financial centre, is home to companies and financial institutions that together are responsible for approximately 15% of global emissions, it could fundamentally shape the global response to the climate emergency.

Many of the world’s largest companies have already begun to make climate-related disclosures but given the urgent changes needed to meet the goals of the Paris Agreement, voluntary uptake remains too slow.

Writing to the Business Secretary Alok Sharma, Labour’s Shadow Minister for Climate Change Matthew Pennycook and the Shadow Exchequer Secretary to the Treasury Wes Streeting are urging the government to fully implement the TCFD recommendations, with mandatory reporting for all listed companies to be brought into force for the 2021-22 reporting year, before COP26 begins.

Matthew Pennycook MP, Shadow Climate Change Minister said:

“If we are to meet the goals of the Paris Agreement, we need a whole economy transition with climate change factored into every financial decision.

“It is time to implement mandatory disclosure so that climate risk is properly measured and managed, that there is a level-playing field for businesses, and that investors can seize the opportunities provided by the transition to a low-carbon economy.

“The UK is uniquely placed to help green the global financial system and by being the first country to implement mandatory climate-related reporting we have a chance to lead the world as hosts of COP26.”