This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

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-related information included in the narrative in the front end of the annual report and the numbers disclosed in the financial statements.

Investors have also 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. 

Regulators and standard- setters are responding

For periods commencing on or after 1 January 2021, premium-listed commercial companies are required to include a statement in their annual financial report which sets out whether their disclosures are consistent with the Task Force on Climate-related Financial Disclosure (TCFD) recommendations, and to explain if they are not.  The FCA is extending these requirements to standard-listed companies, asset managers, life insurers and FCA-regulated pension providers for periods commencing on or after 1 January 2022.  The scope of businesses required to report in accordance with the TCFD recommendations is expected to increase even further across the UK economy by 2025, with the majority of requirements in place by 2023.

The IFRS Foundation has established an International Sustainability Standards Board (ISSB) to develop and issue global sustainability standards. The intention is for the first standard to be on climate-related reporting, which is expected to be published in 2022.  The ISSB will play the same role for sustainability reporting as the International Accounting Standard Board (IASB) does for financial reporting.  Through the Technical Readiness Working Group, the IFRS Foundation has undertaken preparatory work to refine the prototype disclosure standard developed by the leading sustainability standard-setters and frameworks built on the TCFD's recommendations.  The UK government has stated that it intends to require UK businesses to report against the standards developed by the ISSB and that it will create a mechanism to adopt and endorse standards issued by the ISSB for use in the UK. These will form part of the UK government’s Sustainability Disclosure Requirements.

In 2020, the IFRS Foundation 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.

In the same 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's Annual Review of Corporate Reporting emphasises that the FRC will continue to focus on the disclosure of climate-related risks within annual reports as new disclosure requirements beckon.

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 Common Enforcement Priorities for 2021 financial statements. 

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

Related resources

Article on IFRSs and climate-related disclosures

28 Nov 2019

IASB member Nick Anderson has issued an article discussing how existing requirements within IFRSs relate to climate change risks and other emerging risks.

Recent sustainability and integrated reporting developments

21 Nov 2019

A summary of recent developments at WBCSD, TCFD, IFAC, CFA Institute, WBCSD/ICAEW, and Deloitte.

Governance in brief — FRC issues advice on annual reports for 2019/20 reporting season

14 Nov 2019

The FRC has issued its Annual Review of Corporate Reporting and annual open letter to finance directors and audit committee chairs covering its perspectives on key developments and areas of focus for 2019/20 annual reports. The report sets out the FRC’s “expectations for corporate reporting to improve trust in business”, emphasising the annual report is a vehicle of trust and stewardship.

FRC publishes findings on the quality of corporate reporting in 2018/2019

30 Oct 2019

The Financial Reporting Council (FRC) has published its Annual Review of Corporate Reporting 2018/2019, 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.

FCA publishes feedback statement on climate change and green finance

22 Oct 2019

The Financial Conduct Authority (FCA) has published a Feedback Statement (FS 19/6) on climate change and green finance.

FRC Lab report discussing reporting on climate-related issues

22 Oct 2019

A new report from the Financial Reporting Lab of the UK Financial Reporting Council (FRC) reveals that companies are falling short of investors’ expectations for clearer reporting on climate-related issues. It notes that while reporting on climate change is an evolving practice, investor expectations are changing rapidly.

Annual report insights 2019 — Surveying FTSE reporting

21 Oct 2019

Our latest annual reporting survey, Annual report insights 2019, provides insights into practices in annual reporting, focusing on areas where requirements have changed, where regulators are focusing or where innovative practices are emerging.

Governance in brief — New 2019 reporting requirements for large private companies - a reminder

17 Oct 2019

This publication covers the new governance-related reporting requirements for large private companies in annual reports for periods commencing on or after 1 January 2019.

HM Treasury publishes sustainability reporting guidance for public sector annual reports 2019-2020

03 Oct 2019

HM Treasury has published guidance to assist those in the public sector in meeting sustainability reporting requirements.

Paper on climate-related risk and financial statements

03 Oct 2019

The Australian Accounting Standards Board (AASB) has announced the availability of a paper 'Climate-related Risk and Financial Statements: Implications for Regulators, Preparers, Auditors and Users'.

CRD launches report on alignment between its members' sustainability standards and frameworks and the TCFD recommendations

24 Sep 2019

At the World Congress of Accountants in Australia in November 2018, the Corporate Reporting Dialogue (CRD), which brings together organisations that have significant international influence on the corporate reporting landscape, announced a two-year project focused on aligning the standards and frameworks of its members. A report 'Driving Alignment in Climate-related Reporting' was now launched amongst businesses and investors at the World Economic Forum’s Sustainable Development Impact Summit, during Climate Week NYC.

Recent sustainability and integrated reporting developments

24 Sep 2019

A summary of recent developments at SASB/CDSB, CDSB, ACCA/CAANZ/ICAS, IIRC, and GRI.

Recent sustainability reporting developments

27 Aug 2019

A summary of recent developments at the CFA Institute, CDP, SSE, and GRI.

The Bruce Column — Making the future more realistic than rosy

25 Jul 2019

The Chairman of the International Accounting Standards Board, Hans Hoogervorst, is half way through his second, and final, term as Chairman.

Robert Bruce Interviews – Hans Hoogervorst, Chairman, International Accounting Standards Board

25 Jul 2019

In a wide-ranging video interview Hans Hoogervorst, Chairman of the International Accounting Standards Board, (IASB), talks to Robert Bruce about the risks surrounding climate change, about climate-related financial disclosures, about how the revised Management Commentary Practice Statement will encourage investor-grade non-financial information. He talks about the upcoming Interbank Offer Rate Replacement project, IBOR and its likely accounting consequences, about how he considers the IASB’s Primary Financial Statements Project to be one of the most important pieces of work that the IASB is currently working on, and about the likely outcome of the amendments to the insurance Standard, IFRS17. And finally he discusses whether IFRS have evolved enough to provide security in any future crises, financial or climate, up ahead, and also describes frankly what he feels he has achieved halfway through his final term as Chairman.

European Lab Project Task Force to conduct interviews related to climate-related reporting

19 Jul 2019

The European Lab Project Task Force (PTF) will be conducting interviews in September and October with practitioners who have experience in the reporting or use of climate-related reporting information.

FRC publishes a statement on the Government's Green Finance Strategy

03 Jul 2019

The Government has announced its Green Finance Strategy which recognises the role of the financial sector in delivering global and domestic climate and environmental objectives. In response, the Financial Reporting Council (FRC) has issued a joint statement with other financial regulators, including the Prudential Regulation Authority (PRA), Financial Conduct Authority (FCA) and The Pensions Regulator (TPR) welcoming the strategy.

EC publishes guidelines on reporting climate-related information

19 Jun 2019

The European Commission (EC) has published new guidelines on reporting climate-related information supplementing its non-binding guidelines on non-financial reporting published July 2017.

Accountancy Europe publishes a thought-leadership paper on ways to make corporate governance a driver of a sustainable economy

16 Jun 2019

Accountancy Europe has published a thought-leadership paper which proposes ten ideas to challenge boards, policymakers and regulators as to what steps they can take to change how their businesses are run and drive forward a more sustainable economy which is able to face the threats of climate change, declining natural resources and pollution.

Summary report on the EC consultation on updating the non-binding guidelines on non-financial reporting

12 Jun 2019

The European Commission (EC) has published a report summarising the responses to the draft supplement to its non-binding guidelines on non-financial reporting with specific reference to climate-related information.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.