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

Corporate Reporting Insights 2022 — Surveying FTSE reporting

08 Nov, 2022

Our latest survey of FTSE annual reports, Corporate Reporting Insights 2022, provides insights into annual reporting trends, focusing on areas where requirements have changed, where regulators are focusing and where innovative practices are emerging.

ISSB announces new Partnership Framework, CDP to incorporate ISSB climate standard into its disclosure platform

08 Nov, 2022

At the finance day of 27th United Nations Conference of the Parties (COP27), ISSB Chair Emmanuel Faber will introduce the ISSB’s new Partnership Framework with more than 20 partner organisations. In addition, CDP and the ISSB have announced that CDP will incorporate the IFRS S2 'Climate-related Disclosures' requirements into its global environmental disclosure platform.

ESMA announces enforcement priorities for 2022 financial statements

28 Oct, 2022

The European Securities and Markets Authority (ESMA) has announced the priority issues that the assessment of listed companies' 2022 financial statements will focus on. A special focus is on Russia’s invasion of Ukraine and climate-related disclosures.

FRC publishes findings on the quality of corporate reporting in 2021/2022

28 Oct, 2022

The Financial Reporting Council (FRC) has published its Annual Review of Corporate Reporting 2021/2022. The report sets out the FRC’s expectations of areas of corporate reporting that require improvement and highlights the ten most frequently raised topics where improvements to reporting quality are needed.

FCA launches consultation on Sustainability Disclosure Requirements and investment labels

26 Oct, 2022

The Financial Conduct Authority (FCA) has published Consultation Paper CP/22/20 'Sustainability Disclosure Requirements and investment labels'.

FSB calls for continued progress on disclosures on climate-related risks

17 Oct, 2022

The Financial Stability Board (FSB) has submitted to the G20 Finance Ministers and Central Bank Governors two reports as part of its work on addressing climate-related financial risks.

New TCFD status report

17 Oct, 2022

The Task Force on Climate-related Financial Disclosures (TCFD) set up by the Financial Stability Board (FSB) to develop voluntary, consistent climate-related financial risk disclosures for use by companies in providing information to lenders, insurers, investors and other stakeholders has published a fifth status report providing an overview of the extent to which companies in their 2021 reports included information aligned with the core TCFD recommendations published in June 2017.

PRA publishes its thematic feedback from the 2021/2022 round of written auditor reporting

14 Oct, 2022

The Prudential Regulation Authority (PRA) has published a letter to Chief Financial Officers of selected deposit-takers which provides thematic feedback from the PRA’s review of written auditor reports received in 2022.

Need to know — European sustainability reporting: Worldwide reach of the Corporate Sustainability Reporting Directive

14 Oct, 2022

This Need to know outlines the near final text for the Corporate Sustainability Reporting Directive (CSRD) that has been published following the provisional political agreement reached in June 2022.

G7 issues statement on climate disclosures and ISSB’s work

14 Oct, 2022

The G7 Finance Ministers and Central Bank Governors have released a statement underlining economic climate actions and its commitment ‘to move towards mandatory climate-related financial disclosures that provide consistent and decision-useful information for market participants and [it welcomes] the global baseline of sustainability reporting standards currently under development by the International Sustainability Standards Board (ISSB)’.

Accounting roundup — October 2022

14 Oct, 2022

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

FRC Lab publishes report on net zero disclosures

13 Oct, 2022

The Financial Reporting Council (FRC) has published a Lab report on net zero disclosures which is an investor focus area with many companies estimating impact and disclosing climate commitments and transition plans.

FRC and FCA to hold webinar on TCFD disclosures

23 Sep, 2022

The Financial Reporting Council (FRC) and the FInancial Conduct Authority (FCA) are jointly hosting a webinar which will provide their views on the first year of mandatory Task Force on Climate-Related Financial Disclosures (TCFD) reporting.

Governance in brief — FCA and FRC publish findings on climate change disclosure — improvements required

06 Sep, 2022

At the end of July, the Financial Conduct Authority (FCA) and Financial Reporting Council (FRC) published the findings of their first joined up, and mutually complementary, reviews of mandatory climate reporting under the new Listing Rule requirements. The FCA sets out its expectations for compliant reporting, underpinned by the need to establish and embed adequate climate reporting procedures, systems and controls at companies. It outlines the findings from its review and highlights that it is considering whether to take regulatory action against certain listed entities for inadequate reporting. The FCA also reiterates support for the forthcoming International Sustainability Standards Board (ISSB) standards and the intention to move away from ‘comply or explain’ to mandatory disclosure alongside the adoption of those standards in the UK. The FRC’s complementary report evaluated both the quality of Task Force on Climate-related Financial Disclosures (TCFD) and the extent of climate-related disclosures within the financial statements. It provides examples of better practice disclosures which both the FRC and the FCA encourage companies to refer to when preparing or seeking to improve their own disclosures.

Deloitte comment letter on the draft European Sustainability Reporting Standards (ESRS)

10 Aug, 2022

Deloitte supports consistent reporting of high-quality, relevant, reliable and comparable information that will enable investors and other relevant stakeholders to make decisions that support the transition to a green and inclusive economy. The draft European Sustainability Reporting Standards (ESRS) are comprehensive and generally have the potential to result in relevant information, but we have key concerns that they will create issues for the quality of the information provided, the effective implementation and enforceability of the standards, and consequently will not support the ultimate objective.

FRC and FCA publish reports on TCFD compliance by premium-listed companies

03 Aug, 2022

The Financial Reporting Council (FRC) and the Financial Conduct Authority (FCA) have each published reports assessing the quality of Task Force on Climate-related Financial Disclosures (TCFD) by premium-listed companies which were required for periods commencing on or after 1 January 2021. The FRC also reviewed the extent of climate-related disclosures within the financial statements and provides better practice disclosures which it encourages companies to refer to when preparing or seeking to improve their own disclosures.

Accounting roundup — July 2022

27 Jul, 2022

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

Deloitte comment letter on the Transition Plan Taskforce’s call for evidence on proposals for a sector-neutral framework for private sector transition plans

21 Jul, 2022

We have responded to the Transition Plan Taskforce’s (TPT's) call for evidence on proposals for a sector-neutral framework for private sector transition plans.

Need to know — New FCA Policy Statement and Listing Rule promoting better climate-related financial disclosures aligned with TCFD

14 Jul, 2022

The Financial Conduct Authority (FCA) have published a Policy Statement and Listing Rules requiring listed entities to provide Task Force on Climate-related Financial Disclosure (TCFD) aligned disclosures.

FSB progress report on addressing climate-related financial risks

14 Jul, 2022

The Financial Stability Board (FSB) has submitted to the G20 Finance Ministers and Central Bank Governors its first annual progress report on the July 2021 roadmap to address climate-related financial risks.

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