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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

ACCA publishes a report on climate change reporting by companies within the extractive industries

01 Apr 2021

The Association of Chartered Certified Accountants (ACCA) and the University of Glasgow Adam Smith Business School has published a report containing the results of a study that looked at climate change reporting by mining, oil and gas companies.

Finance for the Future Awards - open for entries

30 Mar 2021

The Finance for the Future Awards 2021 are now open for entries to all organisations, globally, whether listed, small, charities, a social enterprise or public sector, and to individuals who drive change in this area.

BEIS launches consultation on requiring mandatory climate-related financial disclosures by publicly quoted companies, large private companies and LLPs

26 Mar 2021

The Department for Business, Energy & Industrial Strategy (BEIS) has launched a consultation on requiring mandatory climate-related financial disclosures by publicly quoted companies, large private companies and Limited Liability Partnerships (LLPs). Comments are requested by 5 May 2021.

FCA Policy Statement and Listing Rule promoting better climate-related financial disclosures aligned with TCFD

01 Mar 2021

The Financial Conduct Authority has published a Policy Statement (PS20/17) and new listing rule LR 9.8.6R(8) to promote higher-quality climate-related financial disclosures. The rule is effective for accounting periods beginning on or after 1 January 2021 and applies to UK incorporated and overseas commercial companies with a premium listing. In this edition of Need to know, we outline the key requirements of the PS.

Consultation launched on draft legislation and draft statutory guidance to improve climate related reporting for occupational pension schemes

01 Feb 2021

The Department for Work and Pensions (DWP) has published a consultation on draft legislation and draft statutory guidance to improve climate-related reporting for occupational pension schemes.

Purpose-driven Business Reporting in Focus — New Prototype Climate-related Financial Disclosure Standard — accelerating progress towards global sustainability standards

22 Dec 2020

This issue discusses the new Prototype Climate-related Financial Disclosure Standard which was published by leading international standard-setters.

FCA introduces new Listing Rule to enhance climate-related disclosures

22 Dec 2020

The Financial Conduct Authority (FCA) has published a Policy Statement (PS20/17) and final rule and guidance promoting better climate-related financial disclosures for UK premium listed commercial companies.

Prototype climate-related financial disclosure standard

21 Dec 2020

Following their statement of intent to work together towards a comprehensive corporate reporting system, the five internationally significant framework- and standard-setting institutions (CDP, CDSB, GRI, IIRC, and SASB) have published a prototype climate-related financial disclosure standard.

ICAEW publishes guide highlighting key considerations for the 2020/21 reporting season

18 Dec 2020

The Institute of Chartered Accountants in England and Wales (ICAEW) Financial Reporting Faculty has published a guide highlighting key areas that preparers should focus on in the forthcoming reporting season.

FRC announces thematic reviews and priority sectors for 2021/2022

11 Dec 2020

The Financial Reporting Council (FRC) has announced its corporate reporting and audit quality review programme for 2021/22 alongside its priority sectors for review.

Financial Reporting Lab publishes its final newsletter for 2020

11 Dec 2020

The Financial Reporting Lab ("the Lab") has published its Q4 newsletter providing highlights of its activities in the fourth quarter of 2020.

Governance in focus — On the board agenda 2021

10 Dec 2020

As 2020 draws to a close, our annual review of board topics will stimulate your thinking and help prepare you for the year ahead.

Accounting Roundup - Closing Out 2020

10 Dec 2020

Closing Out 2020 discusses the significant corporate reporting issues relevant to 31 December 2020 annual reports, covering areas of regulatory focus identified in the FRC's annual review of corporate reporting 2019/20, issues arising from the COVID-19 pandemic and the current economic environment and developments in reporting standards and areas of investor interest.

Creation of new IFRS SSB

03 Dec 2020

Mark Carney, UN Special Envoy for Climate Action and Finance, has commented on the IFRS Foundation Trustees' sustainability consultation and stresses that he endorses the creation of new IFRS Sustainability Standards Board (SSB).

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'.

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