The announcement forms part of the Chancellor's plan for the UK to be the 'world’s first net zero aligned financial centre'.
From 2023, all UK financial institutions and listed companies will have to set out public plans for how they will move to a low-carbon future - in line with the UK's 2050 net-zero target.
The strategies will need to include targets to reduce greenhouse gas emissions, and steps which firms intend to take to get there.
A new body, called the Transition Plan Taskforce, will be created to guard against greenwashing [the process of conveying a false impression or providing misleading information about how a company's products are more environmentally sound] when firms draw up their climate transition plans.
Firms and their shareholders will be left to decide how their businesses adapt to this transition, including how they intend to decarbonise.
And although the plans will need to be published, the Government said that 'the aim is to increase transparency and accountability' and the UK was not 'making firm-level net-zero commitments mandatory'.
Speaking to delegates at the UN's climate change conference, COP26, in Glasgow earlier today (3 November), the Chancellor said the changes would mean: "Better and more consistent climate data; sovereign green bonds; mandatory sustainability disclosures; proper climate risk surveillance; and proper global reporting standards."
