The rest of the firms will see the rules come into force from January 2023, with a publication deadline of June 30, 2024.
The regulator said many larger firms are already making voluntary disclosures and have therefore already invested in the resources to do so. However, the initial costs for smaller firms are likely to be higher and so the phased approach gives them time to prepare.
The FCA stated: “Overall, the proposed timing is consistent with the government’s commitment to achieve a net-zero economy by 2050. A longer timeframe for implementation would be incompatible with the urgency and scale of the changes needed to support the transition to a low-carbon economy.”
In a separate 87-page consultation, the FCA discussed extending its climate reporting rules to companies that issue standard listed equity shares.
The FCA stated: “We are proposing to implement the new rule and associated guidance in a way that mirrors the existing rule and guidance for premium listed commercial companies.”
These companies would have to set out in their annual report whether they have made disclosures which are consistent with the TCFD’s recommendations.
The FCA stated: “Better disclosure about companies’ exposure to climate-related risks and opportunities will lead to more informed market pricing and help drive investment towards green projects and activities. Improving climate-related disclosures along the investment chain has therefore been central to our sustainable finance strategy.”
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