ESG 2.1 Preparation of climate-related reports

1. (1)

   1A firm (excluding an OPS firm) must prepare and publish its TCFD entity report and any public TCFD product reports by 30 June of each calendar year.

2. (2)

   If a firm (including an OPS firm) receives a request for on-demand TCFD information2 from a person who is entitled to make such request under ESG 2.3.5R, it must prepare and provide the on-demand TCFD information2 to the person within a reasonable period of time and in a format which the firm, acting reasonably, considers appropriate to meet the information needs of that person.

1. (1)

   1A firm must cover a reporting period of 12 months starting no earlier than 1 January of the previous calendar year in its TCFD entity report.

2. (2)

   The reporting period in (1) may be changed by the firm in subsequent yearly reports, but the firm must ensure there is no period of time after 1 January 2022 which is not covered by its TCFD entity report, issuing an interim report if necessary.

3. (3)

   A firm must adopt a calculation date within the 12-month reporting period covered by the TCFD entity report in calculating any metrics and targets either for inclusion in its TCFD entity report or its TCFD product reports.

1A firm must take all reasonable steps to publish its TCFD entity report and its public TCFD product reports in a way that makes it easy for prospective readers to locate and access, including, as a minimum, by making the most recent of these reports available in a prominent place on the main website for the business of the firm.

1A firm must ensure the climate-related financial disclosures in its climate-related reports are consistent with the TCFD Recommendations and Recommended Disclosures, unless otherwise specified by rules in this chapter.

1In complying with ESG 2.1.5R, a firm must take reasonable steps to ensure its climate-related financial disclosures also reflect the following materials, to the extent they are relevant to the firm’s climate-related reports:

1. (1)

   section C of the TCFD Annex, entitled “Guidance for All Sectors”; and, as applicable,

2. (2)

   part 3, section D of the TCFD Annex, entitled “Asset Owners”; or

3. (3)

   part 4, section D of the TCFD Annex, entitled “Asset Managers”.

1In satisfying its reporting and disclosure obligations under this chapter, a firm must, insofar as is reasonably practicable, use the most up to date information available.

1In preparing a TCFD product report or underlying asset data, a firm must select, from within the 12-month reporting period, the most recent calculation date for which up to date information is available.

1A firm must not disclose metrics or quantitative scenario analysis or examples where:

1. (1)

   there are gaps in underlying data or methodological challenges; and

2. (2)

   these data gaps or methodological challenges cannot be addressed using proxy data or assumptions without the resulting disclosure, in the reasonable opinion of the firm, being misleading.

1In addition, a firm must ensure its climate-related report includes an adequate explanation of:

1. (1)

   any gaps in the underlying data relied upon to make climate-related financial disclosures consistent with the TCFD Recommendations and Recommended Disclosures;

2. (2)

   how the firm has addressed these gaps, for example, by using proxy data or assumptions and briefly setting out any methodologies used in doing so, providing relevant contextual information and explaining any limitations of the approach;

3. (3)

   any metrics or quantitative scenario analysis or examples that the firm has not been able to disclose, in accordance with ESG 2.1.10R; and

4. (4)

   in respect of (3),

   1. (a)

      the gaps in underlying data or methodological challenges that have resulted in the firm being unable to make the relevant disclosure;

   2. (b)

      why the firm has not been able to address those gaps or challenges using proxy data or assumptions; and

   3. (c)

      what steps the firm will take to address those gaps or challenges in the future.

1. (1)

   1A firm may include hyperlinks and cross-references to relevant climate-related financial disclosures contained in a third party’s climate reporting, where such information enables the firm to make climate-related financial disclosures consistent with the TCFD Recommendations and Recommended Disclosures.

2. (2)

   The firm must set out the rationale for relying on these third party disclosures, and any deviations between the third party’s approach and that of the firm, where relevant to the TCFD Recommendations and Recommended Disclosures.

3. (3)

   An insurer or pure reinsurer which operates linked funds which mirror funds operated by a third party (but which are not close-matched by an insurer’s or pure reinsurer’s direct investment in that third party’s fund) must consider the extent to which it is appropriate to rely wholly or partly on disclosures by that third party.

1Where relevant, a firm may also draw links and make reference to its TCFD product report from its TCFD entity report and vice versa.