Disclosure of climate data: who has to share?

Last October the UK Government revealed plans to enshrine mandatory disclosures of climate-related operations for larger businesses in a new law. From 2022 more than 1,300 of the country’s largest companies, including both traded and private companies, will be required to share their climate-related financial information on public record.

This announcement makes the UK the first G20 country to enshrine this type of climate data-sharing in law. The legislation will be executed in line with recommendations from the Government’s Taskforce on Climate-related Financial Disclosures (TCFD). By obliging businesses to provide this insight into corporate climate-related risks and opportunities, the Government aims to intensify visibility of the improvements so that they can be made across every sector, both in legislation and in setting future targets for industry. Additionally, these disclosures will reportedly help support the Government’s future investment decisions.

Which companies need to share climate data?

The requirement of who will be required to disclose this climate data, and how, is outlined in the Department for Business, Energy & Industrial Strategy’s non-binding guidance document.

UK-registered companies (as well as some Northern Irish businesses¹) will be impacted by this law if they match one or more of the following descriptions:

• Any company that has more than 500 employees and a turnover of more than £500m
• Any company identified as a Relevant Public Interest Entity (PIE) that has more than 500 employees
• Any company with securities admitted to the Alternative Investment Market (AIM) and more than 500 employees

The term “company” here also includes any Limited Liability Partnership (LLP), meaning that any establishment of this nature with more than 500 employees and over £500m turnover will be obliged to share their data. Additionally, any traded or banking LLP with more than 500 employees will also need to share climate data, regardless of annual revenue.

When do companies have to share their data?

The legislation will be introduced from 6^th April 2022, from when all companies and LLPs will be required to comply without exception. The collection of this data will happen on a yearly basis, and, as a financial report, run in conjunction with the fiscal year.

How do companies share this data?

All businesses that meet the requirements above will be obliged to disclose any climate-related financial information within their annual strategic report. The sharing of this data should be included as part of the Non-Financial and Sustainability Information Statement, formerly known as the Non-Financial Information Statement.