Nineteenth Report Contents

Instruments of interest

Draft Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2021

4.These draft Regulations propose new reporting obligations for certain UK registered companies, including certain listed companies and companies with more than 500 employees and a turnover of more than £500 million, which would require them to report climate-related financial information as part of their Strategic Report, in line with the recommendations of the industry-led Taskforce on Climate-related Financial Disclosures (TCFD).1 The additional information will describe a company’s governance, strategy, risk management, performance indicators and targets in relation to climate change. The Department for Business, Energy and Industrial Strategy (BEIS) says that the new requirements are to support the UK’s transition towards net zero greenhouse gas emissions by 2050, by improving the way investors, policymakers, civil society and businesses are informed of the likely impacts of climate change, thereby enabling investment decisions to reflect climate risks better, leading to a more climate-resilient economy. The new requirements are to come into force on 6 April 2022 and would apply in relation to any financial year of a company which commences on or after that date.

5.The Department says that the draft Regulations form part of wider efforts to make climate-related financial disclosures mandatory across the UK economy, and that a further instrument will be laid under the negative procedure in December to make equivalent changes in relation to certain limited liability partnerships (LLPs). According to BEIS, regulatory action is needed because the current voluntary approach “is unlikely to be effective”: while the TCFD framework is widely supported, current levels of disclosure across the economy are low and reporting quality varies significantly.

6.The Department expects annual net costs of £145.3 million (in 2019 prices) for businesses covered by these draft Regulations and by the further instrument which will make provisions for LLPs. We note that the Department will produce guidance on the new reporting requirements which, according to the Impact Assessment, will be around 125 pages long. This suggests a considerable degree of complexity. In the absence of the actual guidance, it is difficult to form a view of the nature and extent of the new reporting requirements, and how robust the Department’s assessment of the impact on businesses is.

Draft Terrorism Prevention and Investigation Measures Act 2011 (Continuation) Order 2021

7.The Prevention of Terrorism Act 2005 (the “2005 Act”), provides the Home Secretary with the power to impose certain measures on an individual, whom she reasonably believes has been involved in terrorism-related activity that may put the public at risk. For example, she may restrict the person’s movements, finances, and communications with others. Such measures are imposed by means of a “TPIM notice”, and the duration and terms of these notices have recently been strengthened by the Counter-Terrorism and Sentencing Act 2021. There are five such notices currently in operation.2

8.TPIMs are civil preventative measures used to manage the threat posed by terrorists who cannot be prosecuted for a terrorism-related offence or deported in the case of foreign nationals. The 2005 Act contains a review clause which allows this provision to expire after five years unless renewed by the Home Secretary. This Order makes no change to the TPIM notices regime but extends their availability to 14 December 2026.

1 Task Force on Climate Related Financial Disclosures, Final Report: Recommendations of the Task Force on Climate-related Financial Disclosures (June 2017): [accessed 15 November 2021].

2 See HLWS 329, Session 2021–22.

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