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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-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

FRC issues its 2022 suite of Taxonomies

11 Oct 2021

The Financial Reporting Council (FRC) has issued the 2022 suite of FRC Taxonomies.

IFRS Foundation publishes webcast on the Technical Readiness Working Group

07 Oct 2021

The IFRS Foundation has published a webcast which provides an introduction of the Technical Readiness Working Group (TRWG) members, summary of its work programme, and an expected timeline of the TRWG.

PRA publishes its thematic feedback from the 2020/2021 round of written auditor reporting

06 Oct 2021

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 2021.

Regulations to improve climate-related reporting for occupational pension schemes now in force

01 Oct 2021

The Occupational Pension Schemes (Climate Change Governance and Reporting) Regulations 2021 and the Occupational Pension Schemes (Climate Change Governance and Reporting) (Miscellaneous Provisions and Amendments) Regulations 2021) (‘the Regulations’) are now in force.

Carbon Tracker publishes a report on a study of climate risks in financial reporting

20 Sep 2021

Carbon Tracker has published a report on a study performed in collaboration with the Climate Accounting Project examining climate risks in financial reporting.

We comment on the FCA’s consultation paper CP21/18

11 Sep 2021

We have published our comment letter on Financial Conduct Authority’s (FCA's) consultation paper CP21/18 'Enhancing climate-related disclosures by standard listed companies and seeking views on ESG topics in capital markets' (“the CP”).

We comment on the FCA’s consultation paper CP21/17

11 Sep 2021

We have published our comment letter on Financial Conduct Authority’s (FCA's) consultation paper CP21/17 'Enhancing climate-related disclosures by asset managers, life insurers and FCA-regulated pension providers' (“the CP”).

Deloitte comment letter on the FCA’s consultation paper CP21/18

11 Sep 2021

We have published our comment letter on Financial Conduct Authority’s (FCA's) consultation paper CP21/18 'Enhancing climate-related disclosures by standard listed companies and seeking views on ESG topics in capital markets' (“the CP”).

Deloitte comment letter on the FCA’s consultation paper CP21/17

11 Sep 2021

We have published our comment letter on the Financial Conduct Authority’s (FCA's) consultation paper CP21/17 'Enhancing climate-related disclosures by asset managers, life insurers and FCA-regulated pension providers (“the CP”).

FRC publishes review findings on SECR

09 Sep 2021

The Financial Reporting Council (FRC) has published the findings of its review of how a sample of companies and Limited Liability Partnerships (LLPs) had complied with the Streamlined Energy and Carbon Reporting Requirements (SECR) which came into effect from 1 April 2019. The review assesses compliance with SECR, identifies emerging good practice and sets out the FRC’s expectations for reporting in future periods.

FRC publishes its third Annual Enforcement Review

03 Aug 2021

The Financial Reporting Council (FRC) has published its third Annual Enforcement Review.

Deloitte comment letter on TCFD's proposed climate-related guidance

09 Jul 2021

We have commented on the Task Force on Climate-related Financial Disclosure (TCFD)’s June 2021 document "Proposed Guidance on Climate-related Metrics, Targets, and Transition Plans".

The Pensions Regulator consults on draft guidance on governance and reporting of climate-related risks and opportunities

09 Jul 2021

The Pensions Regulator (TPR) has published a consultation on proposed new guidance to assist trustees in meeting tougher standards of governance in relation to climate change risks and opportunities.

Accountancy Europe comments on ways to address the climate emergency

09 Jul 2021

Accountancy Europe has provided feedback on the proposed EU Corporate Sustainability Reporting Directive (CSRD) and has released a publication on cooperation in sustainability reporting standard-setting.

FSB roadmap for addressing climate-related financial risks

08 Jul 2021

The Financial Stability Board (FSB) has submitted to the G20 Finance Ministers and Central Bank Governors for endorsement a comprehensive roadmap to address climate-related financial risks. The roadmap outlines the work underway and still to be done by standard-setting bodies and other international organisations over a multi-year period.

Financial Reporting Lab publishes a snapshot of uptake of SASB Standards

08 Jul 2021

The Financial Reporting Lab ("the Lab") has published a snapshot highlighting the adoption of Sustainability Accounting Standards Board (SASB) Standards by companies in the UK.

On the board agenda – half year 2021

27 Jun 2021

This half year update is a timely reminder of some of the important reporting areas for board focus as we enter the second half of 2021. Our articles focus on interim reporting for those of you with December year ends, and an overview of changes in the regulatory reporting landscape as the Financial Reporting Council (FRC) works towards its goal to transform itself into the Audit, Reporting and Governance Authority (ARGA).

FCA consults on further climate-related disclosure rules for listed companies and certain regulated firms

23 Jun 2021

The Financial Conduct Authority (FCA) has published new proposals on climate-related disclosure rules for listed companies and certain regulated firms. It highlights that currently the ‘quantity and quality of climate-related financial disclosures does not yet meet investors’ needs’.

Deloitte comment letter on SEC's requests for input on climate-related and other ESG disclosures

22 Jun 2021

We have commented on the US Securities and Exchange Commission's (SEC) statement requesting input from investors, registrants, and other market participants on whether current disclosures related to climate change adequately inform investors.

TCFD consults on updates to its 2017 recommendations

08 Jun 2021

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 is consulting on updates to its final recommendations on climate-related financial disclosures as disclosure practices and the use of disclosures by financial and non-financial organisations have continued to progress since 2017.

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