UK Law and Practice Contributed by: Ruth Knox and Julian Wolfgramm-King, Paul Hastings LLP
producers on a similar domestic product or input. The tax should also avoid discriminating against imports or different sources of imports. However, if found in breach, it could possibly be justified on environmental grounds. Where a measure is nonetheless found to be incon - sistent with core principles, it may be justified under GATT health and environmental exceptions. For this, it has to be demonstrated that a measure is: “neces - sary to protect human, animal or plant life or health” or related to the conservation of exhaustible natural resources and “made effective in conjunction with restrictions on domestic production or consump - tion”, and does not discriminate arbitrarily between countries in similar conditions or can be seen as a disguised restriction on international trade. CBAM should be developed primarily as a climate measure aimed at reducing emissions, and the carbon price applied to imports should not exceed the price paid by domestic producers. See 2.3 National Legal Regime – UK Carbon Bor - der Adjustment Mechanism, for more detail on how the UK is co-ordinating or seeking to align the devel - opment of domestic carbon pricing measures with measures or initiatives in other jurisdictions. 4. Liability for Climate Change and ESG Reporting 4.1 Liability for Climate Change and ESG Reporting Longstanding Disclosure Regimes Since 2013, companies in scope of annual reporting requirements under the Companies Act 2006 have been required to publish details of their carbon foot - print and carbon intensity of operations. The Com - panies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022 and the Limited Liabil - ity Partnerships (Climate-related Financial Disclosure) Regulations 2022 amended these provisions to place requirements on certain publicly listed companies, large private companies and LLPs to publish disclo - sures pursuant to the Task Force on Climate-related Financial Disclosures (TCFD) in addition to carbon
footprinting data across Scope 1, 2 and 3 GHG emis - sions. The long-standing compliance regime in respect of energy efficiency in the UK is the Energy Savings Opportunity Scheme, which emerged in 2014 as the implementing legislation for the EU Energy Efficiency Directive. It requires in-scope entities to assess energy savings opportunities across their in-scope group and submit a declaration to the EA when this has been completed. The UK led the world on climate-related financial dis - closures for listed entities when it introduced changes to the UK Listing Rules in 2020 to require premium list - ed entities to report against the TCFD. In 2021, these disclosure requirements were extended to standard listed entities and the UK subsequently committed to mandate TCFD-aligned disclosures across the UK economy by 2025. FCA ESG Sourcebook and Sustainability Disclosure Requirements The UK took the step of mandating TCFD-aligned disclosures for in-scope FCA-authorised firms from December 2021 in the new ESG Sourcebook, which forms part of the FCA Handbook for regulated firms. This was followed by the publication of the UK Sus - tainability Disclosure Requirements by the FCA in November 2023 (SDR), which sought to regulate misleading claims about sustainability and require detailed disclosures by FCA-regulated firms in respect of financial products marketed on the basis of sustain - ability. UK SRS is the UK’s sustainability disclosure frame - work, published on 25 February 2026. Compliance becomes binding through the FCA: under CP26/5, in-scope listed companies would report against UK SRS S2 climate from accounting periods beginning 1 January 2027, with Scope 3 and wider UK SRS S1 topics phased in on comply-or-explain. UK SRS S1 and S2 mirrors IFRS S1 and S2. UK SRS compliance is currently voluntary. Under FCA CP26/5, approximately 515 listed companies would be required to report against UK SRS S2 climate dis - closures for accounting periods beginning 1 January
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