Part 1: Regulatory Framework Sustainability disclosure requirements Section 21: Sustainability disclosure requirements
The Act inserts two sections about sustainability disclosure requirements, 416A and 416B, into FSMA 2000. The Act enables HM Treasury to prepare an SDR policy statement concerning disclosure requirements in connection with matters relating to sustainability, as defined in the Act, whenever it considers appropriate to do so.
	Subsections (3) to (5) oblige HM Treasury to consult the FCA and the PRA when preparing an SDR policy statement and to publish it. HM Treasury must keep the SDR policy statement under review and may revise or withdraw it.
	Subsections (6) to (10) oblige the FCA and the PRA to provide a report to HM Treasury on any matter required in connection with the preparation of the policy statement if requested by HM Treasury.
	Subsection (9) determines that the FCA and the PRA are not prevented or restricted from sharing information with HM Treasury for the purposes of providing reports to HM Treasury by section 348 of FSMA 2000 (Restrictions on Disclosure of Confidential Information), or regulations made under section 349, notably the Financial Services and Markets Act 2000 (Disclosure of Confidential Information) Regulations 2001.
	As per subsection (10), the disapplication of section 348 and regulations made under 349 in subsection (9) does not apply in relation to information provided to the FCA or the PRA by a regulatory authority outside the United Kingdom.
	New section 416B imposes an obligation on the FCA and the PRA to have regard to any published HM Treasury SDR policy statement before making rules or issuing guidance in connection with disclosure concerning matters relating to sustainability.
	Subsections (3) and (4) insert new provisions into Schedule 1ZA of FSMA 2000 (FCA annual report) and Schedule 1ZB of FSMA 2000 (PRA annual report) requiring the FCA and the PRA, separately, to report about how they have satisfied the requirement in section 138EA(2) of FSMA 2000 (matters to consider when making rules) in relation to disclosure concerning matters relating to sustainability and the obligation in section 416B(1) to have regard to the SDR policy statement.