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Climate-related disclosure has moved from voluntary practice to established market expectation. Two internationally recognised frameworks that influence UK practice are the Task Force on Climate-related Financial Disclosures (TCFD) and the International Sustainability Standards Board (ISSB) standards; both focus on governance, risk management, scenario analysis and metrics. In the UK regulatory ecosystem, the Financial Conduct Authority has issued rules and guidance that shape expectations for listed firms and authorised asset managers, while government guidance and sector bodies provide practical implementation support.
For real estate asset managers the practical implications are concrete: consistent measurement of energy use, greenhouse gas emissions (scope 1, 2 and relevant scope 3), climate risk assessment at asset and portfolio level, and clear governance over data collection and assurance. Property portfolios pose particular challenges for scope 3 emissions and embodied carbon data, requiring engagement with occupiers, contractors and service providers to obtain reliable inputs.
Good practice is to embed disclosure into asset management workflows: specify necessary data in lease schedules, include sustainability clauses in contracts, and align internal KPIs with external disclosure metrics. External assurance, whether limited or reasonable, is increasingly required by investors and helps improve data quality.
Disclosure frameworks are tools to support risk identification, capital allocation and engagement rather than targets in themselves. For trustees, asset managers and operators the priority is to build repeatable processes that produce comparable, auditable information so stakeholders can make informed assessments of climate-related exposure and management.