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

Multilateral development banks confirm support for work of the ISSB at COP28

30 Nov, 2023

At COP 28, currently held in Dubai, United Arab Emirates, the Asian Infrastructure Investment Bank, the European Investment Bank, the Inter-American Development Bank and the European Bank for Reconstruction and Development have confirmed their support for the work of the International Sustainability Standards Board (ISSB).

ACCA publishes a new guide on sustainability reporting preparation

28 Nov, 2023

The Association of Chartered Certified Accountants (ACCA) has published a new guide 'Sustainability reporting - the guide to preparation' to help companies start to prepare for sustainability reporting.

A4S publishes third edition of introduction to sustainability-related reporting

28 Nov, 2023

Accounting for Sustainability (A4S) has published the third edition of 'Navigating the Reporting Landscape'.

FRC issues policy update on the UK Corporate Governance Code

09 Nov, 2023

In light of the Government's withdrawal of proposed secondary legislation laid in July covering the Audit & Assurance Policy, the Resilience Statement, the Material Fraud Statement and enhanced reporting on distributions, the Financial Reporting Council (FRC) has issued a policy announcement confirming that the update to the UK Corporate Governance Code ("the Code") will go ahead but will recognise the wider debate about business reporting requirements and burdens across the economy.

GRI establishes 'Sustainability Innovation Lab'

09 Nov, 2023

The Global Reporting Initiative (GRI) has announced the upcoming launch of the Sustainability Innovation Lab (SIL), in partnership with the IFRS Foundation. Through the SIL, representatives of GRI, the ISSB and other key stakeholders will collaborate to identify emerging sustainability disclosure topics, developing concepts, best practices and data-driven solutions.

First meeting of the transition implementation group on IFRS S1 and IFRS S2

08 Nov, 2023

The inaugural meeting of the 'Transition Implementation Group on IFRS S1 and IFRS S2' (TIG) will take place on 21 November 2023. The TIG was set up to inform the ISSB about potential implementation questions that could arise when companies implement the new standards IFRS S1 'General Requirements for Disclosure of Sustainability-related Financial Information' and IFRS S2 'Climate-related Disclosures'.

ESMA publishes results of a fact-finding exercise on corporate reporting practices under the Taxonomy Regulation

29 Oct, 2023

The European Securities and Markets Authority (ESMA) has published a summary of findings of a fact-finding exercise on corporate reporting practices under the Taxonomy Regulation.

European Commission consults on delaying certain ESRSs

25 Oct, 2023

On 24 October 2023, the European Commission launched a two-month consultation on the postponement of the sector-specific European Sustainability Reporting Standards (ESRS) as well as the ESRS for third country companies.

ESMA report on disclosures of climate-related matters in the financial statements

25 Oct, 2023

The European Securities and Markets Authority (ESMA) has a published report with examples of climate-related matters in IFRS financial statements.

Q&A platform launched to support ESRS implementation

25 Oct, 2023

The European Financial Reporting Advisory Group (EFRAG) has launched an ESRS Q&A platform that entities can use to submit questions to EFRAG regarding the implementation of the European Sustainability Reporting Standards (ESRS).

The Department for Energy Security and Net Zero launches call for evidence on Scope 3 GHG emissions reporting

20 Oct, 2023

The Department for Energy Security and Net Zero (DESNZ) has launched a call for evidence on Scope 3 greenhouse gas emissions reporting.

WBCSD publishes annual review of sustainability and integrated reports

20 Oct, 2023

The World Business Council for Sustainable Developments (WBCSD) has published its 2023 annual review of its member companies' sustainability and integrated reports.

We comment on the UK Sustainability Disclosure Technical Advisory Committee’s call for evidence on the UK endorsement of IFRS S1 and IFRS S2

20 Oct, 2023

We have published our response to the UK Sustainability Disclosure Technical Advisory Committee’s (UK SDTAC’s) call for evidence on the UK endorsement of IFRS S1 and IFRS S2 (“the call for evidence”). 

TCFD publishes its 2023 status report

19 Oct, 2023

In October, the Task Force on Climate-related Financial Disclosures (TCFD) published its 2023 status report

EP votes on delaying or abandoning ESRSs

17 Oct, 2023

The European Parliament has voted on a motion that sought to delay or withdraw the European Sustainability Reporting Standards (ESRS).

FSB publishes annual progress report on climate-related disclosures

12 Oct, 2023

The Financial Stability Board (FSB) has published its annual progress report on climate-related disclosures. The report has been delivered to G20 Finance Ministers and Central Bank Governors for their 11-12 October 2023 meeting.

Blackline documents for revised SASB Standards released

11 Oct, 2023

The ISSB SASB Standards Board Advisor Group has issued a set of blackline documents detailing upcoming revisions to the SASB Standards. These revisions will enhance the international applicability of the Standards.

Transition plan Taskforce publishes its finalised Disclosure Framework and supporting guidance

11 Oct, 2023

The Transition Plan Taskforce (TPT) was established by the UK government in April 2022 with a two-year mandate to develop the ‘gold standard’ for climate transition plans. On 9 October, the TPT published its finalised sector neutral Disclosure Framework and supporting guidance.

California adopts legislation requiring climate disclosures

11 Oct, 2023

On 7 October 2023, the California Governor signed into law two state senate bills that collectively require certain public and private US companies doing business in California to provide both quantitative and qualitative climate disclosures.

FRC publishes findings on the quality of corporate reporting in 2022/2023

07 Oct, 2023

The Financial Reporting Council (FRC) has published its Annual Review of Corporate Reporting 2022/2023. The report sets out the FRC’s expectations for areas of corporate reporting that require improvement and highlights the ten most frequently raised topics where improvements to reporting quality are needed. The findings follow a review of 263 annual reports and accounts with weighting in favour of the FTSE 350. 

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