The FCA has published findings from its review of climate reporting by asset managers, life insurers and FCA-regulated pension providers.
In 2021, the FCA finalised its climate disclosure rules, requiring the above firms to disclose climate-related information in line with the Taskforce on Climate-related Financial Disclosures (TCFD) recommendations. The FCA decided to review how the rules have been working, sampling 10 TCFD entity reports, 77 TCFD product reports, and engaging with trade associations and firms.
Overall, the FCA found the rules to have increased firms’ consideration of climate risks and supported their integration into decision-making processes. Firms were more transparent with clients, but encountered difficulties with the availability of data and consistent methodologies.
Some information was also considered too complex for retail investors to engage with, and firms querying whether the regime could be more proportionate in places, perhaps via simplification in reporting obligations.