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Climate-related resources

Climate change continues to be an area of specific focus for in­vestors, reg­u­lat­ors and other busi­ness stake­hold­ers who are increasingly de­mand­ing better dis­clos­ures on climate change matters and chal­len­ging com­pan­ies who are not factor­ing the effects of climate change into their crit­ical ac­count­ing judge­ments. Investors want:

  • to see how the impacts of climate change have been reflected in the measurement and recognition of assets and liabilities;
  • more transparency on the assumptions used and sensitivities to those assumptions; and
  • to be confident that there is consistency between climate scenarios included in the narrative in the front end of the annual report and the numbers disclosed in the financial statements.

Recently investors have set out their expectations for Paris-aligned accounts - accounts that adequately reflect the impact of getting to net zero emissions by 2050 for assets, liabilities, profits and losses. Additionally the UK Government has announced the intention to make Task Force on Climate-related Financial Disclosures (TCFD) aligned disclosures fully mandatory across the economy by 2025. The Financial Conduct Authority (FCA) has committed to introduce TCFD for premium listed companies in 2021 and to consult in the first half of 2021 on extending the scope of these rules, including for asset managers, life insurers and pension providers.

During the year the Financial Reporting Council (FRC) published a thematic review of climate-related considerations by boards, companies, auditors and professional bodies and investors. This highlighted that corporate reporting needs to improve to meet the expectations of investors and other users on the urgent issue of climate change. The FRC will continue to focus on the disclosure of climate-related risks within annual reports as a priority area for 2020/21 and highlights in its Annual Report that it aims to “support the Government’s green finance strategy to embed climate-related issues into corporate reporting and investment decision making”.

The FRC’s year-end letter to Audit Committee Chairs and Finance Directors and the climate thematic review set out its reporting expectations for the coming year.

The European Securities and Markets Authority (ESMA) has also announced that it will focus on disclosure of risks related to climate change as part of its enforcement priorities for 2020 financial statements. The IFRS Foundation has published educational material to highlight how existing requirements in IFRS Standards require companies to consider climate-related matters when their effect is material to the financial statements.

This UK Accounting plus page in­cludes our climate-related re­sources to assist com­pan­ies.  It includes links to:

Related resources

A Closer Look — Investor demand for corporate reporting in line with the Paris Agreement on climate change

01 Dec 2020

This publication provides a background on the Paris Agreement and discusses what it means for assumptions to be 'Paris-aligned' as well as what requirements are highlighted by the IFRS Foundation's publication 'In Brief: IFRS Standards and climate-related disclosures' and the educational material and how might they appy in practice.

We comment on the Trustees' sustainability consultation

01 Dec 2020

Deloitte has commented on the IFRS Foundation Trustees’ consultation paper on sustainability reporting published in September 2020. In our comment letter, we stress that we support standard-setting at a global level because global issues need global solutions. Supply and value chains are global and, therefore, face global risks and require a global approach. Consequently, Deloitte supports the IFRS Foundation’s proposal to establish a global sustainability standard-setter (SSB) alongside the IASB and under the governance and oversight of the IFRS Foundation.

Deloitte comment letter on the Trustees' sustainability consultation

01 Dec 2020

We stress that the scale of the challenges and the increasing momentum from all stakeholders for a global solution for sustainability reporting standards make the undeniable case for immediate action and consequently, support the IFRS Foundation’s proposal to establish a global sustainability standard-setter alongside the IASB and under the governance and oversight of the IFRS Foundation.

Governance in brief - FRC issues advice on annual reports for 2020/21 reporting season

23 Nov 2020

FRC issues advice on annual reports for 2019/20 reporting season

Educational material on applying IFRSs to climate-related matters

20 Nov 2020

The IFRS Foundation has released a publication that shows how existing IFRS requirements require companies to consider climate-related matters when their effect is material to the financial statements.

Global investors call for the Paris Agreement to be factored into financial reporting

19 Nov 2020

The Institutional Investors Group on Climate Change (IIGCC), the European membership body for investor collaboration on climate change, has published 'Investor Expectations for Paris-aligned Accounts'.

Recordings of the webinars on Trustees' sustainability consultation

19 Nov 2020

On 17 November 2020, the Trustees of the IFRS Foundation offered two webinars and moderated Q&As on their sustainability consultation launched in September.

FRC publishes year-end advice to Audit Committee Chairs and Finance Directors in advance of the 2020/21 reporting season

14 Nov 2020

The Financial Reporting Council (FRC) has published a letter to Audit Committee Chairs and Finance Directors, in advance of the 2020/21 reporting season, setting out its expectations for preparers of reports and accounts for the coming year.

UK to make TCFD aligned disclosures mandatory by 2025

12 Nov 2020

The Chancellor, Rishi Sunak, has announced the intention to make Task Force on Climate-related Financial Disclosures (TCFD) aligned disclosures fully mandatory across the economy by 2025. This marks an important step in establishing consistent global climate and sustainability reporting standards.

FRC publishes the results of its climate thematic review

10 Nov 2020

The Financial Reporting Council (FRC) has published the results of its thematic review of climate-related considerations by boards, companies, auditors and professional bodies and investors. The results of the review highlight that corporate reporting needs to improve to meet the expectations of investors and other users on the urgent issue of climate change.

Annual report insights 2020-Surveying FTSE reporting

29 Oct 2020

Our latest annual reporting survey, Annual report insights 2020, provides insights into practices in annual reporting, focusing on areas where requirements have changed, where regulators are focusing or where innovative practices are emerging.

New TCFD status report, additional guidance, public consultation

29 Oct 2020

The Task Force on Climate-related Financial Disclosures (TCFD) set up by the Financial Stability Board (FSB) to develop voluntary, consistent climate-related financial risk disclosures for use by companies in providing information to lenders, insurers, investors and other stakeholders has published a third status report providing an overview of the extent to which companies in their 2019 reports included information aligned with the core TCFD recommendations published in June 2017.

FRC publishes findings on the quality of corporate reporting in 2019/2020

21 Oct 2020

The Financial Reporting Council (FRC) has published its Annual Review of Corporate Reporting 2019/2020, which provides the FRC's assessment of corporate reporting in the UK based on evidence from a variety of sources, including the work of the FRC's own Corporate Reporting Review (CRR) team. The report sets out the FRC’s expectations of areas of corporate reporting that require improvement and what it expects companies to focus on in the coming reporting season. The FRC expects companies to consider its findings during the financial reporting process.

Climate Crisis: Mark Carney on the role of the board in transition to net zero

16 Oct 2020

Mark Carney, United Nations Special Envoy for Climate Action and Finance and former Governor of the Bank of England, discusses the need for a whole economy transition to achieve net zero. He is joined in a panel discussion on the role of the Board and the special responsibility of the Chair in the transition to net zero.

Deloitte comment letter on the FCA’s consultation paper 20/3 'Proposals to enhance climate-related disclosures by listed issuers and clarification of existing disclosure obligations '

02 Oct 2020

We have published our comment letter on FCA’s consultation paper 20/3 Proposals to enhance climate-related disclosures by listed issuers and clarification of existing disclosure obligations (“the CP”).

We comment on the FCA’s consultation paper 20/3 'Proposals to enhance climate-related disclosures by listed issuers and clarification of existing disclosure obligations '

02 Oct 2020

We have published our comment letter on FCA’s consultation paper 20/3 Proposals to enhance climate-related disclosures by listed issuers and clarification of existing disclosure obligations (“the CP”).

Investor groups call on companies to reflect climate-related risks in financial reporting.

21 Sep 2020

Investor groups from around the world, representing over $103 trillion in assets under management, have published an open letter calling on companies to ensure that their financial reports and accounts reflect the recent opinion from the International Accounting Standards Board (IASB) and are prepared using assumptions consistent with the Paris Agreement on climate change.

FRC publishes annual report 2019/20

22 Jul 2020

The Financial Reporting Council (FRC) has published its 2019/20 annual report (“the annual report”).

The Climate Financial Risk Forum publishes its guide to help the financial industry address climate-related financial risks

08 Jul 2020

The Climate Financial Risk Forum (CFRF, jointly established in March 2019 by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA)) has published an industry guide addressing climate-related financial risks.

IPSASB Q&A document on climate change

23 Jun 2020

The staff of the International Public Sector Accounting Standards Board (IPSASB) has developed a Questions & Answers (Q&A) document highlighting the relevant standards and guidance for the public sector in applying the Board’s current guidance to provide clear, comparable, and relevant information on climate change.

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