Climate-related news

Reporting on climate-change continues to be an area of specific focus for investors, regulators and other business stakeholders who are increasingly expecting clearer, more specific and quantified disclosures on material climate-related risks and opportunities affected businesses.

Whilst premium-listed commercial companies and companies with a standard listing of shares or Global Depositary Receipts (GDRs) representing equity shares will now be familiar with providing climate-related financial disclosures consistent with the the recommendations and recommended disclosures of the Task Force on Climate-related Financial Disclosures (TCFD) on a ‘comply or explain’ basis, new Climate-related Financial Disclosure Regulations ("CFD Regulations") will affect entities with a 31 December year-end for the first time in 2023.

These Regulations, approved by the UK Government in January 2022, require UK public interest entities, Alternative Investment Market (AIM) companies, banking and traded LLPs, and other UK companies and limited liability partnerships (LLPs) with more than £500m turnover to make climate-related financial disclosures with exemptions for companies and LLPs with 500 or fewer employees. Many companies in the scope of TCFD disclosures under the Listing Rules will also be in scope of the CFD Regulations and therefore need to ensure that their disclosures comply with those requirements as well. Non-binding guidance issued by the UK government sets out expectations as to what should be disclosed and will help in-scope entities comply with these new requirements.

Both the Financial Reporting Council (FRC) in its thematic reviews TCFD disclosures and climate in the financial statements and TCFD – metrics and targets and the Financial Conduct Authority's (FCA's) Review of TCFD-aligned disclosures by premium listed commercial companies set out their disclosure expectations in this area. They expect businesses to consider climate-related matters and their effects when providing a balanced and comprehensive analysis of their position and performance, together with a description of the principal risks and uncertainties that they face.

The European Securities and Markets Authority (ESMA) has also announced that it will focus on climate-related matters as part of its Common Enforcement Priorities for 2023 financial statements.

Additionally an FRC Lab report provides key messages for those companies making net zero commitments with a number of key messages reiterated within the FRC's Annual Review of Corporate Reporting 2022/23.

Whilst climate reporting is improving, regulators will be looking for continued improvement in 2023 and the FRC has indicated that this coming reporting season, as reporting becomes more established, the it is likely to enter into substantive correspondence with companies where their disclosures do not meet its expectations.

Looking forwards, the International Sustainability Standards Board (ISSB) has published its first two standards: IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures. The UK Government, in its 2023 Green Finance Strategy, reaffirmed its intention to adopt these standards for use in the UK, following a formal assessment of the standards and has stated its intention to finalise the endorsement decision on the ISSB standards in 2024. Once endorsed, consideration will then be given to the scope and timing of mandatory adoption of UK-endorsed ISSB standards for UK entities, with a phased implementation being considered.  In August 2023 the FCA announced plans to consult on proposals to update the Listing Rules to refer to UK-endorsed ISSB standards and is aiming to finalise its policy position on this matter by the end of 2024, with new requirements taking effect for accounting periods beginning on or after 1 January 2025.

This page includes all of our news on the financial reporting impacts of climate change.  

Related news

Basel Committee urged to back ISSB standards

19 Mar, 2024

UK Finance, representing over 300 firms from the banking and finance industry, has used its response to Basel Committee’s climate risk Pillar 3 proposals to urge the Committee to back the ISSB standards to drive global consistency and comparability across all sectors in all jurisdictions to support the transition to a decarbonised economy.

GHG Protocol releases draft summaries of Scope 3 Standard feedback

15 Mar, 2024

The Greenhouse Gas (GHG) Protocol secretariat has released a draft summary report providing a detailed overview of stakeholder feedback from a survey it conducted on its Scope 3 Standard. In addition, the secretariat has released a proposal summary giving an overview of proposal submissions related to the Scope 3 Standard.

C&S annual report reveals increase in sustainability policies

12 Mar, 2024

Carrots & Sticks (C&S) has published the 2023 edition of its annual report, which presents a comprehensive assessment of environmental, social and governance (ESG) and sustainability policy worldwide. The report highlights the expanding nature of ESG and sustainability policies since 2020.

SEC adopts rule that will require entities to disclose climate-related information

06 Mar, 2024

In a public meeting held today, the US Securities and Exchange Commission (SEC) has voted to adopt a rule titled 'The Enhancement and Standardization of Climate-Related Disclosures for Investors'.

EFRAG publishes second set of technical explanations on ESRSs

01 Mar, 2024

EFRAG (formerly European Financial Reporting Advisory Group) has published the second set of technical explanations to assist stakeholders in the implementation of the European Sustainability Reporting Standards (ESRSs).

IFRS Foundation Chair delivers keynote on global financial standards and sustainability reporting

29 Feb, 2024

Erkki Liikanen, Chair of the IFRS Foundation Trustees, addressed attendees at the IFRS Foundation Trustees’ stakeholder dinner in Madrid, Spain, on 28 February 2024. Chair Liikanen highlighted the Foundation’s role in global governance, strategy, and oversight of standard-setting boards. He emphasised the significance of the IFRS Foundation’s collaboration, with trustees representing diverse expertise from around the world and underscored the Foundation’s commitment to transparency, with all meetings held publicly and documents accessible online.

SEC announces public meeting to consider rules on climate-related disclosures

29 Feb, 2024

The US Securities and Exchange Commission (SEC) has announced that it will hold an open meeting on 6 March 2024 at 9.45am Eastern Time. In the meeting, the SEC will consider whether to adopt rules to require registrants to provide certain climate-related information in their registration statements and annual reports.

IOSCO Chair speaks on adoption of the ISSB standards

27 Feb, 2024

In a speech at the IFRS Sustainability Symposium on 22 February 2024, Jean-Paul Servais, Chair of the International Organization of Securities Commissions (IOSCO), highlighted the role of jurisdictions in the adoption of the ISSB standards.

IFAC and AICPA & CIMA study observes more detail in sustainability reporting

23 Feb, 2024

The International Federation of Accountants (IFAC), together with AICPA & CIMA, has published an update to its study on the sustainability reporting and assurance practices of the largest global companies. The study reveals that there is now more detail and breadth in these companies' sustainability reporting.

VBA and IFVI publish conceptual framework for impact accounting

23 Feb, 2024

The Value Balancing Alliance (VBA), together with the International Foundation for Valuing Impacts (IFVI), has published 'General Methodology 1: Conceptual Framework for Impact Accounting'.

Guide for the adoption or other use of ISSB standards

22 Feb, 2024

The International Sustainability Standards Board (ISSB) has released a preview version of a guide that is intended to support jurisdictions on their journey to adopt the ISSB standards. At the same time, the ISSB has published a summary of ongoing and completed jurisdictional consultations.

VBA and IFVI publish methodology exposure drafts for valuing social and environmental impacts

15 Feb, 2024

The Value Balancing Alliance (VBA), together with the International Foundation for Valuing Impacts (IFVI), has published exposure drafts 'Environmental Methodology 1 — Greenhouse Gas Emissions — Topic Methodology' and 'Social Methodology 1 — Adequate Wages'.

EU Council and Parliament agree to delay sustainability reporting standards for sectors and third-country entities

09 Feb, 2024

The Council of the European Union (EU) has announced that it agreed with the Parliament to delay the adoption of sustainability reporting standards for certain sectors and for third-country entities by two years.

EFRAG publishes consultation on sustainability reporting XBRL taxonomies

09 Feb, 2024

The European Financial Reporting Advisory Group (EFRAG) has launched a consultation on 'Draft ESRS Set 1 XBRL Taxonomy' and 'Draft Article 8 XBRL Taxonomy'. Comments on the consultation documents are requested by 8 April 2024.

UKEB publishes its final comment letter on IFRS Interpretations Committee’s Tentative Agenda Decision on Climate-related Commitments

08 Feb, 2024

The UK Endorsement Board (UKEB) has published its final comment letter in response to the IFRS Interpretations Committee's Tentative Agenda Decision: 'Climate-related Commitments (IAS 37).

EFRAG publishes first set of technical explanations on ESRSs

06 Feb, 2024

The European Financial Reporting Advisory Group (EFRAG) has published the first set of technical explanations to assist stakeholders in the implementation of the European Sustainability Reporting Standards (ESRSs).

GRI publishes sustainability standard for the mining sector

06 Feb, 2024

The Global Reporting Initiative (GRI) has published a new sustainability standard titled 'GRI 14: Mining Sector 2024'. The new standard provides a consistent set of metrics to be used in reporting the impacts of mining entities.

IASB and ISSB emphasise connectivity in joint technical meeting

29 Jan, 2024

The IASB and ISSB held their inaugural joint technical meeting in London on 25 January 2024. The meeting centered around feedback on the ISSB’s priorities for the next two years, focusing on potential projects for integrating financial and sustainability reporting. The IFRS Foundation has issued a special joint podcast episode where IASB Vice-Chair Linda Mezon-Hutter and ISSB Vice-Chair Sue Lloyd shared insights into the discussion.

GRI publishes update to its biodiversity standard

25 Jan, 2024

The Global Reporting Initiative (GRI) has published ‘GRI 101: Biodiversity 2024’ which replaces ‘GRI 304: Biodiversity 2016’. The revised standard is designed to help entities to disclose their most significant impacts on biodiversity and is effective from 1 January 2026.

EFRAG launches consultation on draft sustainability standards for SMEs

22 Jan, 2024

The European Financial Reporting Advisory Group (EFRAG) has published an exposure draft for a European Sustainability Reporting Standard (ESRS) for listed small- and medium-sized entities (SMEs) (ESRS LSME ED) and an exposure draft for a voluntary reporting standard for non-listed SMEs (VSME ED). Comments are requested by 21 May 2024.

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