Considering climate change – the Commission publishes updated Finance Sector Code of Corporate Governance

The Commission has today published the amended Finance Sector Code of Corporate Governance which asks Boards to consider the impact of climate change on their strategy and risk profile and, where they judge it appropriate, make climate change related disclosures. A copy of the new Code can be found here.

This amendment was consulted on as part of the Commission’s Spring Green Consultation, issued on 11 March 2021. There was broad support for the proposal and a feedback statement addressing the consultation feedback can be found here. The Commission is grateful to everyone who contributed.

Climate change reduction targets will materially alter the economic world we live in over the coming years and may hopefully have a positive impact on our environment. The Commission’s aim in amending the Code is to ensure Bailiwick firms are prepared to engage with this issue in a way that is proportionate to the nature of their businesses, whether it be through client demand for more sustainable solutions or the impact of climate change policies on their asset bases, for example.

Speaking about the updated Finance Sector Code of Corporate Governance, Director General of the Commission, William Mason, said “Amending the Code encourages Boards to prepare for a future in which green consideration and green disclosure are likely to become an important part of international standards for financial services firms.  The changes made today are low key in themselves – designed to encourage timely preparation and action without materially increasing firms’ administrative burdens.”

The amendment to the Code will come into effect for financial years starting from 1 October 2021.