New regulatory powers Sustainability disclosure in financial services Sustainability disclosure requirements
In 2020, the government announced in its Interim Report and Roadmap on the UK’s Taskforce on Climate-related Financial Disclosures (TCFD) that the UK intended to introduce mandatory requirements for organisations to disclose information about their climate-related financial risks, in line with the recommendations of the TCFD.
	Since then, disclosure requirements for organisations have been introduced across the economy:
The FCA introduced requirements for listed companies, asset managers, life insurers and FCA-regulated pension providers;
The Department for Work and Pensions has introduced requirements for occupational pension schemes;
The government laid regulations 12 associated guidance covering UK publicly quoted companies, large private companies and Limited Liability Partnerships; and
Supervisory expectations for banks and insurers on the management of climate-related financial risks also became part of the Bank of England’s supervisory processes in 2022.
	The government’s approach to Sustainability Disclosure Requirements (SDR) was established in the July 2021 document: ‘Greening Finance: A Roadmap to Sustainable Investing ’ (the Greening Finance Roadmap). This set out the foundations of SDR and an indicative pathway to introducing proportionate sectoral requirements that would be taken forward by the relevant departments and regulators.
	SDR aims to address the concerns around transparency, comparability, accountability and efficiency of capital allocation by improving the quality and availability of information to enhance business and financial decision making and organisational risk management. This is intended to support businesses and consumers to make decisions in a more sustainable manner.
	It is also intended to promote financial market integrity by improving transparency about organisations’ sustainability risks, opportunities and impacts, and their approach to managing them. It is designed to reduce the potential harms to investors arising from incomplete or inaccurate information, and help these risks and opportunities to be appropriately priced into markets.