The Task Force on Climate-Related Financial Disclosures (TCFD) is a global standard created by The Financial Stability Board in 2015. It was developed to help companies make their climate-related disclosures more consistent, comparable and transparent. This transparency can help customers make better informed decisions on their investments. The information disclosed is designed to help investors and others understand how organisations think about and assess climate-related risks and opportunities.
The TCFD framework consists of recommended climate-related financial disclosures in four interrelated areas that represent core elements of how companies operate: Governance, Strategy, Risk Management and Metrics on carbon emissions.
The Financial Conduct Authority (FCA) introduced new rules in 2023 for Asset Managers and Asset Owners to make disclosures consistent with the TCFD’s recommendations on an annual basis. This supports the UK government’s commitment to implement mandatory TCFD-aligned disclosure obligations across the UK economy by 2025.
The companies within the M&G group that are required to report under the FCA rules are M&G Investment Management Limited (MAGIM) and Prudential Assurance Company Limited (PAC). The TCFD Entity reports will set out how the firm takes climate-related risks and opportunities into account when managing or administering investments on behalf of customers.
The TCFD entity reports have been prepared by MAGIM and PAC in line with the recommended disclosures in the FCA TCFD Annex published in October 2021, including the all-sector guidance and the supplementary guidance for Asset Managers and Asset Owners.
As a listed entity, M&G plc is required to prepare a TCFD report which is included in the Annual report and accounts
Product or Fund reports – a report containing consistent, comparable climate-related disclosures for products and funds, including a core set of climate metrics.
TCFD reports will be provided for underlying funds that products such as pensions invest in, but not the product itself. The reports will be provided for different types of funds, including authorised funds - such as Open-Ended Investment Companies (OEICs) and unit trusts - with-profits funds, linked funds and default investment strategies.
Where the investment strategy of a fund is to purchase units in an external manager’s authorised fund, we have provided a weblink to the external manager’s website where the TCFD Fund Report will be made available. Since these are not provided by PAC or MAGIM, we have not validated the content of the fund report.
The FCA’s rules aim to increase transparency on how firms are managing financial products, enabling customers to make considered investment. This should, in turn, help to enhance competition in the interests of customers - protect customers from unsuitable products or funds and potentially drive investment towards projects and activities that support the transition to a low carbon economy.