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

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

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) Image

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.

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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 Image

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 Image

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.

FCA Policy Statement and Listing Rule promoting better climate-related financial disclosures aligned with TCFD Image

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 (Financial Stability Board) (lt green) Image

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.

European Union Image

European Council and European Parliament reach an agreement on the corporate sustainability reporting directive (CSRD)

07 Jul, 2022

Following the provisional political agreement on the EU Corporate Sustainability Reporting Directive (CSRD), on 22 June 2022, the near final text for the CSRD has been published.

On the board agenda – half year 2022 Image

Governance in focus — On the board agenda – half year 2022

05 Jul, 2022

At a time when macro topics once again dominate, this half year edition of “On the Board Agenda” has two objectives – first, to act as a reminder of key matters for the half year report, and, second, to help you set the agenda for the remainder of the year, contextualised of course as usual.

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European Parliament and Council reach provisional agreement on CSRD

22 Jun, 2022

The European Council and European Parliament have reached a provisional political agreement on the corporate sustainability reporting directive (CSRD) proposed by the European Commission (EC) in April 2021.

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FRC publishes updated Guidance on the Strategic Report

22 Jun, 2022

The Financial Reporting Council (FRC) has published an updated edition of its Guidance on the Strategic Report to incorporate the new climate-related financial disclosures, following changes in legislation made earlier this year, along with a number of other amendments which have been made to maintain alignment with legislation.

Deloitte comment letter on SEC proposal on climate-related disclosures for investors Image

Deloitte comment letter on SEC proposal on climate-related disclosures for investors

31 May, 2022

We have responded to the request for public comment from the Securities and Exchange Commission (SEC) on the proposed rule ’The Enhancement and Standardization of Climate-Related Disclosures for Investors’.

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FRC Stakeholder Survey — ISSB Exposure Drafts

26 May, 2022

The Financial Reporting Council (FRC) invites stakeholders to share their views on the Exposure Drafts recently published by the newly formed International Sustainability Standards Board (ISSB).

Need to know-European sustainability reporting — EFRAG launches consultation on first set of European Sustainability Reporting Standards Image

Need to know — European sustainability reporting — EFRAG launches consultation on first set of European Sustainability Reporting Standards

24 May, 2022

This Need to know discusses the draft European Sustainability Reporting Standards (ESRS) that have been published by the European Financial Reporting Advisory Group (EFRAG) in April 2022.The publication outlines the background, proposed architecture of ESRS, proposed cross-cutting standards and proposed topical standards.

Financial Reporting Lab Image

Lab calls for participants for a new net zero disclosures project

05 May, 2022

The Financial Reporting Lab is calling for participants to participate in a new project looking at how net zero commitments are reported by companies and used by investors.

Finance for Future awards Image

Finance for the Future Awards – now in their 10th year – open for entries

08 Apr, 2022

The Finance for the Future Awards 2022 are now open for entries to all organisations, globally, whether listed, small, charities, a social enterprise or public sector, and to individuals who drive change in this area.

The new FCA compliance statement on TCFD disclosures-Observations from first reporters Image

The new FCA compliance statement on TCFD disclosures-Observations from first reporters

08 Apr, 2022

This publication presents the results of our survey into how the first wave of December 2021 year-end reporters have approached the new TCFD reporting requirements.

Need to know-Sustainability reporting- ISSB proposes global baseline of sustainability disclosure standards for capital markets Image

Need to know — Sustainability reporting — ISSB proposes global baseline of sustainability disclosure standards for capital markets

06 Apr, 2022

This Need to know outlines the proposals for IFRS Sustainability Disclosure Standards IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures published for public consultation on 31 March 2022 by the International Sustainability Standards Board.

A Closer Look — Investor demand for corporate reporting in line with the Paris Agreement on climate change Image

A Closer Look — Investor demand for corporate reporting in line with the Paris Agreement on climate change

25 Mar, 2022

This publication is an update to 'A Closer Look' first published in December 2020 and addresses output of the November 2021 COP26 conference in Glasgow and further expressions from stakeholders of their expectations in respect of climate-related information in financial statements, examining perceived information gaps and how they might be addressed under current IFRS Accounting Standards.

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European Commission adopts proposal for a Directive on corporate sustainability due diligence

01 Mar, 2022

The European Commission has adopted a proposal (and associated annex) for a Directive on corporate sustainability due diligence.

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