What we’re all about

Tell us how we can deliver content that’s right for you.

Commercial Real Estate
Financial Services
Hotel & Leisure
Professional Services
Retail & Manufacturing
Technology & Telecoms
*This selection will make changes across the site
Confirm Selection

TCFD Briefing: When will your business be subject to mandatory reporting?

By Alison Mungall
8th December 2020

Forthcoming annual reports will be published at a time of significant economic uncertainty from Covid-19 and the UK’s exit from the European Union. Against this background, Rishi Sunak announced on 9 November that the UK will become the first country in the world to make Task Force on Climate-related Financial Disclosures (TCFD) disclosures fully mandatory across the economy by 2025, with a significant portion of the mandatory requirements in place by 2023

Consistent and transparent climate related financial disclosures will contribute to better informed pricing and capital allocation. This should lead to investment in more sustainable projects and activities. But for many firms, mandatory TCFD reporting will be a considerable burden. Recent press reports have announced that for some firms, mandatory reporting could be introduced as early as 2021. This seems to give an unreasonably short time to prepare for compulsory disclosures. It has also  led to some alarm and confusion about reporting deadlines.


What is the proposed timescale for mandatory TCFD reporting, and which organisations will be in scope?

The simple answer is that all dates are indicative at this stage. On 9 November, the Treasury issued its Interim Report of the UK’s Joint Government-Regulator TCFD Taskforce . Rishi Sunak’s announcement was based on this report. In the report, the Government announced its intention to make TCFD aligned disclosures mandatory across the UK economy by 2025 and the report sets out the proposed pathway towards this ambition. The aim is to bring in the mandatory requirements on a phased basis, with a significant portion of the mandatory requirements in place by 2023. 

The published roadmap sets out an indicative path, showing how coverage of disclosure could increase each year over the next 5 years as potential new regulations and legislation come into force. It is anticipated that implementation measures will be introduced incrementally by regulators and government departments. The timing of the new regulations will be subject to consultations, legislative processes etc. 

For some organisations, it is anticipated that disclosure obligations will be introduced with flexibility to take account of data limitations. Disclosures will be made on an “as far as able” or “comply or “explain” basis (see below). 

A summary of the proposed mandatory TCFD reporting implementation is outlined below. The organisations in scope are shown under five sections, with a summary of the regulator/government strategy for each section, the body leading the implementation, and indicative timelines


Summary of proposed implementation approach

  1. Listed commercial companies (FCA leading)


Include TCFD-aligned disclosure rules in FCA Listing Rules. UK-registered listed companies that meet certain criteria may also be subject to proposed Companies Act provisions.

FCA has proposed a new TCFD-aligned disclosure rule for companies with a UK premium listing¹. Initial rule will require companies with a UK premium listing to state whether they have disclosed in line with the TCFD’s recommendations or to explain why disclosures have not been made.

Extending to a wider scope of listed commercial companies is to be determined.

Next Steps:

Consultation closed 1 October 2020.  FCA aims to finalise rules and publish Policy Statement by end-2020.  FCA will consult on proposed new rules for a wider scope of listed issuers in the first half of 2021 and will also consider consulting on making the disclosures mandatory (i.e. no “comply or explain” flexibility).

Phasing of Implementation:

Phase 1: The FCA plans to implement the new TCFD-aligned disclosure rule for commercial companies with a UK premium listing to take effect in reporting periods starting 1 January 2021 (i.e. first mandatory disclosures are planned to be in 31 December 2021 accounts). 

Phase 2: The FCA will consult in the first half of 2021 on proposed new rules for a wider scope of issuers, coordinating with BEIS’ consultation on TCFD-aligned disclosure obligations in the Companies Act (see below). 


  1. UK registered companies (BEIS² leading)


Require UK registered companies, including very large private companies, to make TCFD-aligned disclosures in their annual report and accounts. Obligation to be included in the Companies Act 2006. Scope of provisions will also include certain UK-registered listed companies that are above the thresholds for a medium company.

Next steps:

BEIS expects to issue public consultation on new Companies Act 2006 obligations in early 2021. Regulations planned to be laid in the Commons and made in mid-2021 (subject to parliamentary time).

Phasing of Implementation:

Phase 1: Subject to the outcome of consultation, cost-benefit analysis, and regulations being made in the Commons, regulations will come into force in 2022

Phase 2: The Government would consult further before expanding the scope of the regulations following the review in 2023.  


  1. Banks, building societies and insurance companies (PRA³ leading)


No additional regulatory changes are proposed at this time for this sector. The PRA continues through its supervisory engagement to embed climate-related financial reporting. 

It supports implementation of existing and new measures to optimise the quality and consistency of climate disclosure.

The majority of the largest PRA-regulated firms are also likely to be subject to proposed disclosure requirements from the FCA and BEIS. 

Next steps:

The PRA will perform a review of firms’ published disclosures in 2022, which it will use to decide whether to introduce further measures to improve quality or consistency. If such measures are required, the PRA would expect to consult.

Phasing of Implementation:  

Phase 1: Period to 31 Dec 2021: PRA supports firm’s development of disclosure capabilities. 

Phase 2: Period from 1 January 2022: PRA reviews quality of firms’ 2021 disclosures. If mandatory requirements found to be necessary, public consultation and implementation will follow.


4:  Asset managers, life insurers and FCA-regulated pension schemes (FCA leading)


FCA intends to consult on potential TCFD-aligned disclosure rules directed at clients and end-investors for UK authorised asset managers, life insurers and FCA-regulated pension providers. 

Implementation of TCFD-aligned disclosures for listed open and closed-ended investment companies will be considered in parallel.

Next steps:

FCA is developing detailed policy proposals for consultation. It will publish consultation paper in the first half of 2021. 

Phasing of Implementation:  

Subject to consultation, cost-benefit analysis and other statutory requirements, the FCA would aim to finalise rules by the end of 2021, with these coming into force in 2022. The FCA will consider phasing the obligations, initially introducing fully TCFD-aligned disclosure rules for the largest firms. A longer implementation timeframe, or phased introduction of certain measures, will be considered for other in-scope firms.  


5: Occupational Pension Schemes (DWP⁴ leading)


Amendments to the Pension Schemes Bill, to include powers to make regulations and issue statutory guidance to implement TCFD.

Subject to consultation, DWP proposes to make regulations requiring compliance with all of the TCFD recommendations for those occupational pension schemes in scope. However, in relation to Scenario Analysis and Metrics & Targets, trustees would be required to comply “as far as they are able” when obtaining data.     

Next steps:

Consultation on draft regulations to follow in early 2021. Subject to consultation and Royal Assent, first governance requirements to apply from October 2021

Phasing of Implementation: 

Phase 1: From Oct 2021: All occupational pension schemes with  £5bn in assets under ownership, all authorised Master Trusts and all authorised collective money purchase schemes would be in scope of climate governance and TCFD-aligned requirements. 

Phase 2: From Oct 2022: All occupational pension schemes with  £1bn in assets under management, all authorised Master Trusts and all authorised collective money purchase schemes would be in scope.

Phase 3: 2024: review and subsequently consult on proposals to bring schemes with less than £1 billion in assets into scope. 


Table 1: Summary of proposed implementation approach, information taken from Interim Report of the UK’s Joint Government-Regulator TCFD Taskforce

¹ Premium listed companies comply with the UK’s highest standards of regulation and corporate governance and may benefit from a lower cost of capital though greater investor confidence

² Department for Business, Energy and Industrial Strategy

3 Bank of England regulates and supervises financial services firms through the Prudential Regulation Authority (PRA)

Department for Work and Pensions (DWP) 



The Roadmap illustrates how coverage of disclosures could increase each year. However, new regulations are subject to the outcomes of consultation processes and the legislative process though Parliament, which can affect the timing. And the bad news on the economy may mean that the Government’s priority won’t be getting this legislation through Parliament. Therefore there is a degree of uncertainty about the implementation agenda. But tackling climate change remains a priority and the UN Climate Summit (COP26) in November 2021 in the UK may concentrate minds in Government and regulatory bodies. 

Although complex, the adoption of TCFD recommended disclosures ensures that the effects of climate change are considered in an organisation’s business and investment decisions. Companies are demonstrating responsibility and foresight in their consideration of climate issues to investors, customers and peers. As TCFD disclosures will definitely become mandatory in the UK in the short to medium term future, why not consider joining more than 1400 organisations and start the process towards voluntary disclosure? That way, you will be prepared when they become mandatory.

If you would like to find out more about voluntary or mandatory TCFD reporting, speak to one of our experts by emailing [email protected]