UK Pushes G-7 Countries to Adopt Mandatory Climate Reporting for Big Companies

By , Alessandra Migliaccio and Alberto Nardelli | May 20, 2021

UK Chancellor of the Exchequer Rishi Sunak is pushing the Group of Seven (G-7) economies to impose mandatory reporting of environmental risks on their big companies, people familiar with the matter said.

Under the proposals, the biggest companies would report annually on their exposure to risks and opportunities presented by climate change. It would follow guidelines set out in 2017 by the Task Force on Climate-Related Financial Disclosures.

While a final communique has yet to be agreed on for the June 4-5 meeting, the people said climate disclosure is a priority being pushed by the UK presidency in the finance track of the G-7 talks this year. A senior UK official said the discussions are on a knife-edge and could yet go either way.

Read more: G20 Companies to Face Common Disclosure Requirements for Climate Risks

The drive comes as the UK seeks to burnish its post-Brexit credentials as a global leader on climate change. Prime Minister Boris Johnson has already announced the most ambitious target to cut greenhouse gases among major developed countries, and its other aims during its G-7 presidency include persuading the other nations to phase out fossil-fuel subsidies.

Sunak spoke in the past week about the issue with U.S. Treasury Secretary Janet Yellen and Canadian Finance Minister Chrystia Freeland, according to the British official. The UK wants to make the proposal work and if it succeeds, it will mark a major step to getting markets to play their part in the transition to a net zero economy, the official said.

Meanwhile, President Joe Biden is expected on Thursday to order his administration to create a strategy to quantify risks for both public and private financial assets posed by climate change in yet another sign that the idea is gaining momentum.

The UK chancellor in November announced that the UK would “mandate climate disclosures by large companies and financial institutions across our economy by 2025” in measures that go “further” than the TCFD proposals. He said the UK was the first G-20 nation to do so.

French President Emmanuel Macron has also championed transparency on corporate efforts to address climate change, saying in December that “binding” international agreement on the disclosures is needed. Italy also supports the efforts and is pushing the issue in its presidency of the G-20.

Michael R. Bloomberg, the founder and majority shareholder of Bloomberg LP, the parent company of Bloomberg News, is the chair of TCFD.

–With assistance from Ania Nussbaum.

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