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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 scenarios included in the narrative in the front end of the annual report and the numbers disclosed in the financial statements.

Recently investors have 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. Additionally the UK Government has announced the intention to make Task Force on Climate-related Financial Disclosures (TCFD) aligned disclosures fully mandatory across the economy by 2025. The Financial Conduct Authority (FCA) has committed to introduce TCFD for premium listed companies in 2021 and to consult in the first half of 2021 on extending the scope of these rules, including for asset managers, life insurers and pension providers.

During the 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 will continue to focus on the disclosure of climate-related risks within annual reports as a priority area for 2020/21 and highlights in its Annual Report that it aims to “support the Government’s green finance strategy to embed climate-related issues into corporate reporting and investment decision making”.

The FRC’s year-end letter to Audit Committee Chairs and Finance Directors and the climate thematic review set out its reporting expectations for the coming year.

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 enforcement priorities for 2020 financial statements. The IFRS Foundation has 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.

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

Related resources

New TCFD status report, additional guidance, public consultation

29 Oct 2020

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 third status report providing an overview of the extent to which companies in their 2019 reports included information aligned with the core TCFD recommendations published in June 2017.

FRC publishes findings on the quality of corporate reporting in 2019/2020

21 Oct 2020

The Financial Reporting Council (FRC) has published its Annual Review of Corporate Reporting 2019/2020, 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. The report sets out the FRC’s expectations of areas of corporate reporting that require improvement and what it expects companies to focus on in the coming reporting season. The FRC expects companies to consider its findings during the financial reporting process.

Climate Crisis: Mark Carney on the role of the board in transition to net zero

16 Oct 2020

Mark Carney, United Nations Special Envoy for Climate Action and Finance and former Governor of the Bank of England, discusses the need for a whole economy transition to achieve net zero. He is joined in a panel discussion on the role of the Board and the special responsibility of the Chair in the transition to net zero.

Deloitte comment letter on the FCA’s consultation paper 20/3 'Proposals to enhance climate-related disclosures by listed issuers and clarification of existing disclosure obligations '

02 Oct 2020

We have published our comment letter on FCA’s consultation paper 20/3 Proposals to enhance climate-related disclosures by listed issuers and clarification of existing disclosure obligations (“the CP”).

We comment on the FCA’s consultation paper 20/3 'Proposals to enhance climate-related disclosures by listed issuers and clarification of existing disclosure obligations '

02 Oct 2020

We have published our comment letter on FCA’s consultation paper 20/3 Proposals to enhance climate-related disclosures by listed issuers and clarification of existing disclosure obligations (“the CP”).

Investor groups call on companies to reflect climate-related risks in financial reporting.

21 Sep 2020

Investor groups from around the world, representing over $103 trillion in assets under management, have published an open letter calling on companies to ensure that their financial reports and accounts reflect the recent opinion from the International Accounting Standards Board (IASB) and are prepared using assumptions consistent with the Paris Agreement on climate change.

FRC publishes annual report 2019/20

22 Jul 2020

The Financial Reporting Council (FRC) has published its 2019/20 annual report (“the annual report”).

The Climate Financial Risk Forum publishes its guide to help the financial industry address climate-related financial risks

08 Jul 2020

The Climate Financial Risk Forum (CFRF, jointly established in March 2019 by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA)) has published an industry guide addressing climate-related financial risks.

IPSASB Q&A document on climate change

23 Jun 2020

The staff of the International Public Sector Accounting Standards Board (IPSASB) has developed a Questions & Answers (Q&A) document highlighting the relevant standards and guidance for the public sector in applying the Board’s current guidance to provide clear, comparable, and relevant information on climate change.

Recent sustainability and integrated reporting developments

09 Jun 2020

A summary of recent developments at IMF, CDSB, GRI, the ESAs, SSE, BCBS, IIRC, BMJV, ISAR, and JPX.

EC launches consultation on renewed sustainable finance strategy

09 Apr 2020

In the context of the European Green Deal and building on the 2018 Action Plan on financing sustainable growth, the European Commission (EC) has launched a consultation on its renewed sustainable finance strategy. Despite contrary findings of a recent study commissioned by the EC, the wording and the options for answering one of the questions of the consultation document seem to suggest that IFRSs may hamper sustainable finance.

FRC publishes its plan and budget for 2020/21

24 Mar 2020

The Financial Reporting Council (FRC) has published its plan and budget for 2020/21.

Consultation launched to assist trustees on aligning their pension scheme to the TCFD recommendations

17 Mar 2020

A new consultation has been launched which sets out non-statutory guidance for the trustees of occupational pension schemes on assessing, managing and reporting climate-related risks in line with the Taskforce on Climate-Related Financial Disclosures (TCFD).

FCA issues consultation paper proposing improvements to climate-related disclosures for listed companies

09 Mar 2020

The Financial Conduct Authority (FCA) has published a consultation paper (CP20/3) which proposes to enhance climate-related disclosures by companies with a UK premium listing and clarify existing disclosure obligations.

Call to action in response to climate change

25 Feb 2020

14 accounting bodies have signed a call to action in response to climate change. The bodies, who are all members of A4S’s Accounting Bodies Network, represent over 2.5 million accountants and students globally.

FRC to review how companies and auditors assess and report on the impact of climate change

21 Feb 2020

The Financial Reporting Council (FRC) has announced a major review of how companies and auditors assess and report on the impact of climate change.

FRC publishes its draft plan and budget for 2020/21

12 Feb 2020

The Financial Reporting Council (FRC) has published its draft plan and budget for 2020/21. Comments are requested by 28 February 2020.

European Reporting Lab issues report on climate-related disclosures

06 Feb 2020

The European Lab Project Task Force on Climate-related Reporting has issued, ‘How to improve climate-related reporting — A summary of good practices from Europe and beyond’.

IBC discusses Big4 report on reporting sustainability information at WEF

24 Jan 2020

At the World Economic Forum (WEF), the chief executive officers of many of the world’s largest companies expressed support for aligning on a core set of metrics and disclosures in their annual reports on the non-financial aspects of business performance such as greenhouse gas emissions and strategies, diversity, employee health and well-being and other factors.

ICAEW webinar on the TCFD recommendations

22 Jan 2020

The Institute of Chartered Accountants in England and Wales (ICAEW) will be hosting a webinar looking at the Task Force on Climate-related Financial Disclosures' recommendations in more detail.

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