The UK Government is proposing that from 2022 all large UK private companies and LLPs must include a report on climate change in their annual report. In this case, “large” means organisations with more than 500 employees and a turnover of more than £500 million. It is proposed that this threshold applies to a company group as a whole.
The Task Force on Climate-related Financial Disclosures (TCFD) has suggested various mandatory and voluntary topics on which to report, including how the organisation identifies and assesses the risks of climate change and the steps taken to manage such risks. The government hopes that through the reporting, businesses will take steps to reduce their greenhouse gas emissions and overall negative environmental impact.
It is likely the UK will be the first country in the world to make reporting on climate change and the associated business impacts mandatory.
We would recommend that at this stage organisations start to think about how their business measures up to the TCFD recommendations and consider implementing internal processes focusing on climate change risks and opportunities.
This new reporting proposal is much like the mandatory Modern Slavery Act Statement, which organisations with a global turnover of £36 million or more must publish annually, setting out the steps taken to combat the risks of modern slavery in their supply chains.
For more information and advice on this and similar topics, please get in touch.
Madeleine Rhodes email: MRhodes@redfernlegal.com