Climate disclosures – high on corporate agendas in 2022

To protect investors from greenwashing, the IMF is urging regulators to do more to prevent financial companies from making misleading claims concerning their environmental credentials – ‘Proper regulatory oversight and verification mechanisms are essential to avoid greenwashing.’ Achieving the scale of expansion needed to meet the goal of reducing worldwide carbon emissions to net zero by 2050 will demand that investors properly understand how their money is used.

The UK’s largest companies will be required to make climate-related financial disclosures from April this year. Firms with a turnover in excess of £500m and at least 500 employees are expected to publish the climate related risks they face. On behalf of the first G20 country to make this compulsory, Economic Secretary to the Treasury, John Glen commented, “These requirements will not only help tackle greenwashing but also enable investors and businesses to align their long-term strategies with the UK’s net-zero commitments.”

Disclosure requirements will be aligned to the Task Force on Climate- Related Financial Disclosures, which is backed by over 1,000 global financial institutions, and is responsible for $194trn of assets. The new rules mean companies will need to “focus on the effects of climate change on their business” and communicate to investors how these are being managed, according to Chief Executive of the Investment
Association, Chris Cummings.

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Global attitude to risk variance

Affluent to ultra-high-net-worth UK investors are more conservative than their international counterparts, according to new research3. Over half (54%) of UK respondents rated themselves as conservative in their approach to risk, with the lowest percentage of any nation surveyed (10%) saying they take an aggressive approach. In stark contrast, almost half of Chinese respondents rated themselves aggressive in their approach to risk, with just 19% conservative. Possibly reinforcing the lower risk, long-term mindset, the main reason for two-thirds (66%) of UK respondents for investing and saving is for their retirement, with 35% citing future healthcare costs and entrepreneurial activities (17%).

3Avaloq, 2021,