By Huw Jones
LONDON (Reuters) – Britain’s business ministry said on Wednesday that company disclosures on climate change will be based on internationally-approved standards as it seeks to maintain London’s attractiveness as a global financial centre.
Global securities regulators have given their formal backing to the International Sustainability Standards Board (ISSB) standards Britain says it will follow.
Britain was one of the first major economies to make climate disclosures mandatory for listed companies, using standards from the Task Force on Climate-related Financial Disclosures (TCFD), which formed the basis of the ISSB norms.
“UK-endorsed standards will only divert from the global baseline if absolutely necessary for UK specific matters,” the ministry said in a statement. It said Britain aims to have its version of the global standards ready for use by July 2024.
The European Union and the United States will have their own rules as authorities globally seek to crack down on greenwashing, or companies exaggerating their climate friendly credentials.
Using ISSB norms would make UK company disclosures comparable for investors globally, the ministry said.
“The disclosures required by these standards will help investors to compare information between companies, thereby aiding decision-making; supporting the efficient allocation of capital, and smooth running of the UK’s capital markets,” it added.
Any decisions to make the ISSB-based disclosures mandatory for companies would be taken separately by the government and the Financial Conduct Authority, the ministry said.
The EU, U.S. and ISSB rules replace a patchwork of voluntary, private sector practices that were used to channel trillions of investment dollars.
Critics says it will take time for investors to have an easy way to compare international companies’ exposures to climate change even with the new rules from regulators.
(Reporting by Huw Jones; editing by Barbara Lewis)
