HMT - UK Her Majesty's Treasury

07/25/2024 | Press release | Distributed by Public on 07/25/2024 07:22

TCFD-aligned disclosure Exposure Draft for Phase 3

This Exposure Draft is to consult on new climate-related financial disclosures in entity-level annual reports that align with the TCFD's recommendations.

Introduction

The Phase 3 Exposure Draft addresses the recommended disclosures for the Strategy pillars of the TCFD framework.

Preparers, experts, and other stakeholders from across central government and the wider public sector are asked to provide feedback on the proposed public sector adaptations, interpretations, and considerations - as well as the overall completeness and clarity of the guidance.

Structure

This application guidance is additive, with Phase 3 expanding on the TCFD-aligned disclosure application guidance for Phase 1 and Phase 2. The Phase 1 application guidance was published in July 2023 and addressed the recommended disclosures for the Governance pillar - applying to in-scope central government bodies' annual reports and accounts from 2023-24. The Phase 2 update was published in March 2024, addressing the Risk Management and Metrics and Targets pillars - applying from 2024-25.

Remit

This Exposure Draft covers the whole UK public sector, which is the boundary for the Whole of Government Accounts. However, the relevant authority for each jurisdiction within that boundary will have their own due process for proposing and approving changes to their reporting regime. This consultation does not supplant those processes.

The proposed changes are published for comment only. The proposals may be modified before being formally presented to the Financial Reporting Advisory Board (FRAB) for their approval.

Effective date

The proposed effective date for central government bodies is 1 April 2025, with Phase 3 disclosures required in annual reports and accounts for 2025-26 on a comply or explain basis.

Other public sector bodies should follow the direction from their respective relevant authority. Public sector bodies may choose to voluntarily apply this guidance - in full or in part.