FCA finalises climate disclosure rules for asset managers

Thresholds, exemptions and phased coverage

The rules apply only to firms above a materiality threshold, with a full exemption for asset managers whose assets related to their TCFD in-scope business average less than £5bn over three years. Firms with assets under management of less than £5bn are therefore not caught by the regime.

For asset managers, the regime initially captures those with more than £50bn in assets under management, before extending to smaller firms above the £5bn threshold. For FCA‑regulated asset owners, the initial scope includes firms with at least £25bn in assets under administration.

All remaining in-scope smaller firms with assets above £5bn are brought in through phased implementation, rather than a single start date. This structure differentiates between the largest managers and asset owners and the broader cohort of mid-sized firms that cross the £5bn line. Implementation timetable and reporting cycle

The FCA published PS21/24 on December 17, setting out the final rules and guidance and confirming the implementation timetable. The new climate-related disclosure rules apply from January 1 for the largest in-scope firms.

For asset managers, the regime came into effect on January 1 for those with more than £50bn in assets under management, and for asset owners with at least £25bn in assets under administration. Smaller qualifying firms above the £5bn exemption threshold enter the regime one year later, with rules applying from January 1 the following year.

The first public disclosures in line with the FCA’s requirements must be made by June 30, setting the initial reporting deadline for the largest asset managers and asset owners. Subsequent disclosures must be made by June 30 each year, establishing a fixed annual reporting cadence for both entity-level and product- or portfolio-level climate reports.

The next decision points will centre on how the FCA develops its ESG sourcebook and whether future iterations expand the scope or depth of climate metrics beyond the current TCFD-based baseline.