Companies are forced by Treasury to report their impact on climate change
Companies will be forced by the Treasury to report their impact on climate change, The Mail on Sunday can reveal.
A plan will be published in early October detailing which companies will be affected, what information they must provide and what the deadline is.
The initiative, led by Chancellor Rishi Sunak, comes in the run-up to Cop26, the UN Climate Change Conference in Glasgow, in November.
Eco-friendly: the move is part of a strategy to make Britain the go-to location for ‘green’ finance
The move is also part of a strategy to make the UK the number one place for ‘green’ finance worldwide. It is clear that the Treasury will pass legislation to give regulators the power to compel companies to report.
The government said last November that by 2025 it will be mandatory for companies to disclose the financial risks and opportunities they face from climate change.
A source close to the Treasury said, “We’re moving on now. This [requirements] will cover companies in the real economy, pension plans, financial services and investment products and will request information about the impact they have on the climate and sustainability.’
But the source added that the plan was to have “one streamlined regime for companies to report against” so that companies would not have to deal with myriad different reporting requirements.
Scott Knight, chief audit officer at accountants BDO, said: ‘Climate change is something that investors are starting to take seriously and they will want reliable and comparable information assured by a third party.’
The Investment Association, which represents professional fund managers, wants to change the investment process so that stock selectors consider environmental, social and governance (ESG) risks when buying shares in a company.
One of the goals of the government’s new reporting requirements is to eradicate ‘greenwashing’, where companies label themselves as environmentally friendly without having the necessary paperwork.
It emerged last week that US and German regulators were investigating fund group DWS over claims by a former employee that it had misled customers about its eco-friendly and sustainable investments.
The company said in a statement: “We strongly reject the allegations. DWS remains a firm believer in ESG investing as part of its fiduciary role on behalf of its clients.”