Climate and Sustainability - Q4 2022

• 2023 will see further ESG regulatory requirements either coming into force or being confirmed. These requirements will be across all financial services sectors and cover entity and/or product-level disclosures.

• The FCA will produce its policy statement on Sustainability Disclosure Requirements (SDR) and Investment Labels. The UK Transition Plan Task Force will finalise its guidance on Transition Plans and the UK government is updating the Green Finance Strategy. In addition, The International Sustainability Standards Board (ISSB) will produce finalised sustainability standards in 2023. The UK government has been a firm supporter of the ISSB initiative, and we’d expect to hear more in 2023 on consulting timelines to adopt a UK version of the ISSB standards.

• Firms need to prepare now the systems, controls, governance, risk and data management practices, processes, and policies to ensure they can meet ever increasing ESG scrutiny from regulatory bodies and investors. The fact that identifying, embedding, managing, and reporting climate-related risks brings new challenges for firms compared to managing traditional business risks makes it even more important that firms start preparing.

For a more comprehensive review on this topic, please click on the pdf below: