Climate-related resources

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

Related resources

ESAs issue opinions on ESRS

27 Jan, 2023

On 25 November 2022, the European Commission requested the European Supervisory Authorities (ESAs) to provide an opinion on the technical advice on the first set of European Sustainability Reporting Standards (ESRS), which the European Financial Reporting Advisory Group (EFRAG) submitted on 22 November 2022.

Accounting roundup — January 2023

24 Jan, 2023

This Accounting roundup, covering the period October 2022 through to December 2022, pulls together the headlines for all the latest developments in accounting, providing links to a wealth of further information and resources.

Accounting roundup — Closing Out 2022

10 Jan, 2023

Closing Out 2022 discusses the principal corporate reporting issues arising in respect of 31 December 2022 annual reports, covering areas of regulatory focus identified in the Financial Reporting Council’s (FRC's) Annual Review of Corporate Reporting 2021/2022 and issues arising from the current uncertain economic environment.

IFRS Foundation Trustees hold discussion on sustainability standards

22 Dec, 2022

The IFRS Foundation Trustees have issued insights from a panel discussion held during its quarterly meeting in Seoul, South Korea. The discussion focused on IFRS Sustainability Disclosure Standards and why they are needed.

Sustainability Standards Advisory Forum membership announced

21 Dec, 2022

The Sustainability Standards Advisory Forum (SSAF) composition has been announced and will include representatives from thirteen jurisdictions and regions. The SSAF goal is to provide the ISSB with technical advice in the development of ISSB’s standard-setting.

FRC announces thematic review and priority sectors for 2023/24

20 Dec, 2022

The Financial Reporting Council (FRC) has announced its areas of supervisory focus for 2023/24, including high priority sectors, for corporate reporting reviews and audit quality inspections.

UK government delays process for legislating for the UK Green Taxonomy

16 Dec, 2022

The UK Government has confirmed that it will delay the process for legislating for the UK Green Taxonomy

CSRD published in the Official Journal of the European Union

16 Dec, 2022

After the European Parliament adopted the Corporate Sustainability Reporting Directive (CSRD) on 10 November 2022 and the Council of the European Union gave the final green light on 28 November 2022, the CSRD has now been published in the Official Journal of the European Union.

IPSASB takes next step in public sector sustainability reporting

09 Dec, 2022

Building on strong global stakeholder support for the proposals in its consultation paper 'Advancing Public Sector Sustainability Reporting', the International Public Sector Accounting Standards Board (IPSASB) has decided to commence the scoping of three potential public sector specific sustainability reporting projects pending securing the resources needed to begin guidance development.

Governance in brief — FRC sets out key matters for 2022/23 reporting season

07 Dec, 2022

The Financial Reporting Council (FRC) has published its Annual Review of Corporate Reporting setting out key matters for 2022/23 reporting season.

Governance in focus — On the board agenda 2023

07 Dec, 2022

As 2022 draws to a close, our annual review of board topics has two objectives – first, to act as a reminder of key matters for the reporting season, and second, to help you set the agenda for the year ahead.

Council of the European Union adopts CSRD

28 Nov, 2022

After the European Parliament adopted the Corporate Sustainability Reporting Directive (CSRD) on 10 November 2022, the Council of the European Union has now given the final green light.

Consultation on draft 2023-2025 GSSB work programme

24 Nov, 2022

The Global Sustainability Standards Board (GSSB) has published its draft 2023-2025 work programme and accompanying project schedule for 2023 for public comment.

EFRAG submits draft ESRS to EC

23 Nov, 2022

The European Financial Reporting Advisory Group (EFRAG) has submitted its draft European Sustainability Reporting Standards (ESRS) to the European Commission (EC).

G20 Leaders support upcoming ISSB Standards

17 Nov, 2022

The G20 has issued final declaration following the G20 Leaders meeting held in Bali on 15–16 November 2022.

Transition Plan Taskforce publishes its consultation on private sector transition plans

15 Nov, 2022

At COP27 the UK’s Transition Plan Taskforce (TPT) published its consultation on what private sector companies need to do to implement and disclose a transition plan.

IFAC publishes a report on climate-related disclosure

15 Nov, 2022

The International Federation of Accountants (IFAC) has published a report providing insight into climate-related disclosure.

European Parliament adopts CSRD

10 Nov, 2022

The European Parliament has today adopted the Corporate Sustainability Reporting Directive (CSRD) proposed by the European Commission (EC) in April 2021.

Using sustainability reporting to drive behavioral change

10 Nov, 2022

This publication maps out a potential way forward on using sustainability reporting to drive behavioral change – not just for the adoption of sustainability reporting and organizational transformation, but also to create a broader operating environment conducive to widespread behavior change.

IOSCO outlines need for timely sustainability disclosure and assurance standards

10 Nov, 2022

At COP27, the International Organization for Securities Commissions (IOSCO) has outlined the actions it undertakes to protect investors by mitigating greenwashing in financial markets, to contribute to sustainability disclosure standards benefitting issuers and investors, and to promote well-functioning carbon markets.

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