Gareth Rees and Matthew Dunlap are partners and Stephanie Pong is an associate at Morrison & Foerster. This post is based on a Morrison & Foerster memorandum by Mr. Rees, Mr. Dunlap, Ms. Pong, and James Quirke.
Related research from the Program on Corporate Governance includes The Illusory Promise of Stakeholder Governance (discussed on the Forum here) and Will Corporations Deliver Value to All Stakeholders? (discussed on the Forum here), both by Lucian A. Bebchuk and Roberto Tallarita; Restoration: The Role Stakeholder Governance Must Play in Recreating a Fair and Sustainable American Economy—A Reply to Professor Rock by Leo E. Strine, Jr. (discussed on the Forum here); and Stakeholder Capitalism in the Time of COVID, by Lucian A. Bebchuk, Kobi Kastiel, and Roberto Tallarita (discussed on the Forum here).
Companies and limited liability partnerships (LLPs) “with the greatest economic and environmental impact” are now subject to the legal requirement to assess their climate risks and disclose climate-related financial information as a result of new regulations which came into force on 6 April 2022. This follows the Financial Conduct Authority (FCA) extending climate-related financial disclosure obligations to, among others, standard-listed companies and certain asset managers and owners in December 2021, as discussed in our previous client alert.
Under the Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022 and Limited Liability Partnerships (Climate-related Financial Disclosure) Regulations 2022 (the “Regulations”), certain companies and LLPs—including large private companies—are now obliged to make disclosures of climate-related financial information for accounting periods beginning on or after 6 April 2022.
Companies within scope of the FCA’s Listing Rules will now be subject to two frameworks, and UK government guidance has confirmed disclosures required under the Listing Rules should also be compliant with the new Regulations.