U.K. Is Pushing for G-7 to Adopt Mandatory Climate Reporting

U.K. Chancellor of the Exchequer Rishi Sunak is pushing the Group of Seven economies to impose mandatory reporting of environmental risks on their big companies, people familiar with the matter said.

Under the proposals, the biggest companies would report annually on their exposure to risks and opportunities presented by climate change. It would follow guidelines set out in 2017 by the Task Force on Climate-Related Financial Disclosures.

While a final communique has yet to be agreed on for the June 4-5 meeting, the people said climate disclosure is a priority being pushed by the U.K. presidency in the finance track of the G-7 talks this year. A senior U.K. official said the discussions are on a knife-edge and could yet go either way.

The drive comes as the U.K. seeks to burnish its post-Brexit credentials as a global leader on climate change. Prime Minister Boris Johnson has already announced the most ambitious target to cut greenhouse gases among major developed countries, and its other aims during its G-7 presidency include persuading the other nations to phase out fossil-fuel subsidies.

Sunak spoke in the past week about the issue with U.S. Treasury Secretary Janet Yellen and Canadian Finance Minister Chrystia Freeland, according to the British official. The U.K. wants to make the proposal work and if it succeeds, it will mark a major step to getting markets to play their part in the transition to a net zero economy, the official said.

Meanwhile, President Joe Biden is expected on Thursday to order his administration to create a strategy to quantify risks for both public and private financial assets posed by climate change in yet another sign that the idea is gaining momentum.

The U.K. chancellor in November announced that the U.K. would “mandate climate disclosures by large companies and financial institutions across our economy by 2025” in measures that go “further” than the TCFD proposals. He said the U.K. was the first G-20 nation to do so.

French President Emmanuel Macron has also championed transparency on corporate efforts to address climate change , saying in December that “binding” international agreement on the disclosures is needed. Italy also supports the efforts, and is pushing the issue in its presidency of the G-20.

Michael R. Bloomberg, the founder and majority shareholder of Bloomberg LP, the parent company of Bloomberg News, is the chair of TCFD.

©2021 Bloomberg L.P.

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