Bank of England calls for mandatory company disclosures on climate risks

Credit: REUTERS/HENRY NICHOLLS

A common set of rules on company disclosures is needed to help markets price in risks from climate change, a senior Bank of England official said on Friday.

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LONDON, Oct 16 (Reuters) - A common set of rules on company disclosures is needed to help markets price in risks from climate change, a senior Bank of England official said on Friday.

It is the latest call from the financial sector to harmonise standards globally so that investors can better compare and track how companies are shifting to a lower-carbon economy.

Currently, regulations and rules vary widely across the world, detailing what information companies need to provide.

"Disclosing your plans can improve your credit rating, broaden your investor base, reduce your cost of finance, and economise on the fixed costs of meeting increasingly vocal investor requests for information," the BoE's executive director for markets, Andrew Hauser, told an Investment Association online event on Friday.

Three key building blocks were needed to achieve the goals of cutting carbon emissions, Hauser said.

Standard setters needed to agree on a single, mandatory framework for companies to disclose risks from climate change, he said.

More tools were needed to provide incentives for green investment, and consensus on terminology for asset-allocation strategies to provide a "clear and credible" choice for investors, Hauser said.

"For much of the past decade, those three building blocks have been slow to develop, or vulnerable to charges of ‘greenwashing’ or projects, vehicles or investment strategies that are ‘green’ in name only," Hauser said.

(Reporting by Huw Jones; editing by Andy Bruce, Larry King)

((huw.jones@thomsonreuters.com; +44 207 542 3326; Reuters Messaging: huw.jones.thomsonreuters.com@reuters.net))

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