Exchange in Focus: The London Stock Exchange introduces new climate reporting guidance for issuers

22 October 2021

The London Stock Exchange (LSE) has launched its Climate Transition Offering for London-listed companies. It is the first stock exchange to publish climate reporting guidance based on the United Nations Sustainable Stock Exchanges (SSE)’s Model Guidance on Climate Disclosure which is in line with the Taskforce for Climate Related Financial Disclosures (TCFD) recommendations. London Stock Exchange’s Climate Reporting Guidance is tailored to the UK’s regulatory and policy environment for public companies. The guidance will help companies in London integrate climate risks and opportunities into operational decision making and report carbon performance.  Julia Hoggett, CEO, the London Stock Exchange comments: “Investors are increasingly choosing to allocate capital to companies with clear frameworks for managing climate-related risks and opportunities. While many FTSE 100 companies have already taken a leadership position by committing to net zero by 2050 and before, the London Stock Exchange is home to companies at varying stages of the climate transition. Climate change represents the greatest challenge of our time, and it is essential that the financial market ecosystem supports and stimulates the action necessary across the economy to meet that challenge. Our new Climate Transition Offering launched today will help issuers understand how investor’s view their performance on the transition and facilitate change by providing an action-orientated climate reporting framework aligned with global standards.” 

Understanding climate risk and opportunity

The LSE’s guide highlights the needs of global economy to undergo an industrial transition to rapidly decarbonise, with huge implications for business and the investment community. The finance and investment sectors are also in the spotlight, given their critical role of mobilising finance in support of the transition to net-zero. This guide complements LSEG’s ESG guidance report, which walks the reader through eight key principles to deliver best practices with a focus on climate disclosure principles through the prism of the TCFD recommendations and the latest state of investor and regulator engagement.  Some, such as strategic relevance, via scenario planning, materiality in relation to TCFD-aligned disclosures and Green Revenue reporting driven by the rise of taxonomies, are central to climate disclosure and are covered in depth. Others are of similar relevance – effective communication using recognised frameworks with investment-grade data applies equally to climate and broader ESG reporting. A global hub for sustainable finance, the London Stock Exchange has supported investors and issuers in the transition to a low-carbon and sustainable economy for over a decade. LSEG is also working with the UN SSE to produce comprehensive education resources including training videos and webinars to help London listed companies understand and implement TCFD.   

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About the SSE

​The SSE initiative is a UN Partnership Programme organised by UNCTAD, the UN Global Compact, UNEP FI and the PRI. The SSE’s mission is to provide a global platform for exploring how exchanges, in collaboration with investors, companies (issuers), regulators, policymakers and relevant international organizations, can enhance performance on ESG (environmental, social and corporate governance) issues and encourage sustainable investment, including the financing of the UN Sustainable Development Goals. The SSE seeks to achieve this mission through an integrated programme of conducting evidence-based policy analysis, facilitating a network and forum for multi-stakeholder consensus-building, and providing technical assistance and advisory services.