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Large companies will have to disclose their environmental impact under new government plans

Makbool Javaid, Partner - Simons Muirhead & Burton

Chancellor Rishi Sunak has published a roadmap setting out details on new Sustainability Disclosure Requirements which will mean businesses must start disclosing their environmental impact. The new requirements will also apply to pension schemes, investment products and asset managers and owners.

The roadmap outlines the legislative and regulatory changes that will be made across the economy to arm investors and consumers with the right information by setting world-leading standards on environmental sustainability reporting.

First announced at the Chancellor’s Mansion House speech earlier in the year, the new integrated regime will bring together and streamline existing climate reporting requirements – such as the UK’s commitment to implement mandatory reporting aligned with the Task Force on Climate-Related Financial Disclosures (TCFD) – and go further.

This includes requiring every investment product to set out – for the first time – the environmental impact of the activities it finances and justify clearly any sustainability claims it makes. Asset managers will also need to set out how they incorporate sustainability into their investment strategy to allow consumers to make informed judgements about the kind of firms they want to invest in.

Specific reporting requirements, including scope, timing and detail, will be developed following public consultation.

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