Apex Group’s Melville Rodrigues weighs in on the FCA’s climate proposal
28 June 2021 US
Image: metamorworks/adobe.stock.com
Melville Rodrigues, head of real estate advisory at Apex, has weighed in on the Financial Conduct Authority’s (FCA) proposed enhanced climate related financial disclosures.
The FCA guidelines build on rules introduced in December 2020, applicable to the most prominent listed commercial companies in the UK, which uphold many of the recommendations of the Taskforce on climate-related financial disclosures.
In its latest proposals, which are subject to consultation, the UK watchdog has advised that coverage under these disclosure rules be extended from premium-listed commercial companies to include issuers of standard listed equity shares.
These also propose that a disclosure obligation be introduced for asset managers, life insurers and pension providers that fall under the FCA’s supervisory responsibility.
The authority has called for industry feedback on these proposals by 10 September 2021.
These provisions form part of wider FCA consultation on ESG standards in capital markets, including green and sustainable debt markets and the role played by ESG data and ratings providers.
Commenting on the proposal, Rodrigues says: “On account of the type of firm and/or product or portfolio, these disclosures would be either published in a TCFD product report in a prominent place on the main website for the firm’s business, while also being included in client communication, or made upon request to certain eligible institutional clients.”
The FCA anticipates capturing 98 per cent of both the UK asset management market and held by UK asset owners, with an exemption for managers and owners that have less than £5 billion in assets under management or administration on a three-year rolling average.
The FCA is proposing a phased implementation: 1 January 2022, with the largest, most interconnected firms needing to make the first disclosures by 30 June 2023; and 1 January 2023, with the remaining firms making first disclosures by 30 June 2024.
Rodrigues comments: “The UK asset management sector needs to prepare for the implementation of enhanced climate related financial disclosures, as proposed by the Financial Conduct Authority (FCA) this week and adapting their operations to comply efficiently with these and applicable disclosure required by non-UK regulators. We Apex welcome that they will be clarity on the UK disclosures.”
The FCA guidelines build on rules introduced in December 2020, applicable to the most prominent listed commercial companies in the UK, which uphold many of the recommendations of the Taskforce on climate-related financial disclosures.
In its latest proposals, which are subject to consultation, the UK watchdog has advised that coverage under these disclosure rules be extended from premium-listed commercial companies to include issuers of standard listed equity shares.
These also propose that a disclosure obligation be introduced for asset managers, life insurers and pension providers that fall under the FCA’s supervisory responsibility.
The authority has called for industry feedback on these proposals by 10 September 2021.
These provisions form part of wider FCA consultation on ESG standards in capital markets, including green and sustainable debt markets and the role played by ESG data and ratings providers.
Commenting on the proposal, Rodrigues says: “On account of the type of firm and/or product or portfolio, these disclosures would be either published in a TCFD product report in a prominent place on the main website for the firm’s business, while also being included in client communication, or made upon request to certain eligible institutional clients.”
The FCA anticipates capturing 98 per cent of both the UK asset management market and held by UK asset owners, with an exemption for managers and owners that have less than £5 billion in assets under management or administration on a three-year rolling average.
The FCA is proposing a phased implementation: 1 January 2022, with the largest, most interconnected firms needing to make the first disclosures by 30 June 2023; and 1 January 2023, with the remaining firms making first disclosures by 30 June 2024.
Rodrigues comments: “The UK asset management sector needs to prepare for the implementation of enhanced climate related financial disclosures, as proposed by the Financial Conduct Authority (FCA) this week and adapting their operations to comply efficiently with these and applicable disclosure required by non-UK regulators. We Apex welcome that they will be clarity on the UK disclosures.”
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