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

Stay Tuned Online — January 2024

31 Jan, 2024

Stay Tuned Online is an online corporate reporting update, aimed at helping finance teams keep up to speed with narrative, governance and financial reporting issues. Each update lasts about an hour.

Accounting roundup — January 2024

30 Jan, 2024

This Accounting roundup, covering the period October 2023 through to December 2023, pulls together the headlines for all the latest developments in accounting, providing links to a wealth of further information and resources.

IASB and ISSB emphasise connectivity in joint technical meeting

29 Jan, 2024

The IASB and ISSB held their inaugural joint technical meeting in London on 25 January 2024. The meeting centered around feedback on the ISSB’s priorities for the next two years, focusing on potential projects for integrating financial and sustainability reporting. The IFRS Foundation has issued a special joint podcast episode where IASB Vice-Chair Linda Mezon-Hutter and ISSB Vice-Chair Sue Lloyd shared insights into the discussion.

GRI publishes update to its biodiversity standard

25 Jan, 2024

The Global Reporting Initiative (GRI) has published ‘GRI 101: Biodiversity 2024’ which replaces ‘GRI 304: Biodiversity 2016’. The revised standard is designed to help entities to disclose their most significant impacts on biodiversity and is effective from 1 January 2026.

EFRAG launches consultation on draft sustainability standards for SMEs

22 Jan, 2024

The European Financial Reporting Advisory Group (EFRAG) has published an exposure draft for a European Sustainability Reporting Standard (ESRS) for listed small- and medium-sized entities (SMEs) (ESRS LSME ED) and an exposure draft for a voluntary reporting standard for non-listed SMEs (VSME ED). Comments are requested by 21 May 2024.

Need to know — California Climate Legislation

18 Jan, 2024

In October 2023, the California Governor signed into law two state senate bills and one assembly bill. The senate bills collectively require certain public and private US companies doing business in California to provide both quantitative and qualitative climate disclosures. The assembly bill is intended to combat entities’ “greenwashing” of climate-related emission claims. This newsletter explains the content of the bills.

IFRS Foundation and GRI publish summary of interoperability considerations for GHG emissions

18 Jan, 2024

The Global Reporting Initiative (GRI) and the IFRS Foundation have jointly published an analysis and mapping document titled ‘Interoperability considerations for GHG emissions when applying GRI Standards and ISSB Standards’.

SSE releases guidance on IFRS sustainability disclosure standards

16 Jan, 2024

The Sustainable Stock Exchanges Initiative (SSE) has launched a free toolkit that has been reviewed by the International Sustainability Standards Board (ISSB) and supports stock exchanges and their market participants in the implementation of the IFRS sustainability disclosure standards.

We comment on DESNZ call for evidence on Scope 3 Emissions

11 Jan, 2024

We have published our comment letter on the call for evidence on Scope 3 Emissions in the UK Reporting Landscape issued by the Department for Energy Security and Net Zero (DESNZ).

Deloitte comment letter on DESNZ call for evidence on Scope 3 Emissions

11 Jan, 2024

We have published our comment letter on the call for evidence on Scope 3 Emissions in the UK Reporting Landscape issued by the Department for Energy Security and Net Zero (DESNZ).

IFAC releases literature review to support sustainability reporting

10 Jan, 2024

The International Federation of Accountants (IFAC) published a literature review titled ‘Educating Accountants for a Sustainable Future: A Literature Review of Competencies, Educational Strategies, and Challenges for Sustainability Reporting and Assurance’ that provides insights on how stakeholder demands for relevant and reliable sustainability reporting can be met.

EFRAG proposes implementation guidance for ESRS

22 Dec, 2023

The European Financial Reporting Advisory Group (EFRAG) has published three draft documents that propose implementation guidance for the European Sustainability Reporting Standards (ESRS). The comment period for the draft implementation guidance ends on 2 February 2024.

Governance in focus — On the board agenda 2024

22 Dec, 2023

In the current environment, boards continue to be faced with challenges across all aspects of their remit making effective decision making ever more difficult as different stakeholders pull focus in different directions. Many companies are grappling with forecasting demand and pricing, supply chain disruption, other input cost pressures and challenges in attracting and retaining talent. At the same time boards, have to work hard to keep pace with developments in technology in order to remain ahead of both the opportunities and threats posed by innovations such as Generative AI.

HM Treasury publishes exposure draft of phase 2 of its TCFD-aligned disclosure application guidance

22 Dec, 2023

HM Treasury has published an exposure draft of phase 2 of its guidance on applying the Task Force on Climate-related Financial Disclosure (TCFD) recommendations in central government and, where appropriate, the wider public sector.

EC adopts FAQs on environmental performance reporting under the EU taxonomy

21 Dec, 2023

The EU Commission (EC) has published a frequently asked questions (FAQ) document to assist financial entities with their reporting about environmental performance of activities under the EU taxonomy.

EFRAG and TNFD sign cooperation agreement

21 Dec, 2023

The European Financial Reporting Advisory Group (EFRAG) and the Taskforce on Nature-related Financial Disclosures (TNFD) have signed a cooperation agreement to further advance nature-related reporting.

IFAC analysis highlights the need for integrated internal control to enhance the quality of sustainability reporting

19 Dec, 2023

The International Federation of Accountants (IFAC) has published analysis which calls for companies to establish an integrated internal control environment in order to enhance the quality of their sustainability reporting.

ESMA draft guidelines for supervision of sustainability information

15 Dec, 2023

The European Securities and Markets Authority (ESMA) has published draft guidelines on enforcement of sustainability information. The comment period for the draft guidelines ends on 15 March 2024.

Task Force on Climate-Related Financial Disclosures disbanded

15 Dec, 2023

The Task Force on Climate-related Financial Disclosures (TCFD) has now disbanded.

IFRS Foundation publishes educational material on IFRS S2

14 Dec, 2023

The IFRS Foundation has published educational material on IFRS S2 ‘Climate-related Disclosures’ that is intended to help entities to consider nature and social aspects of climate-related risks and opportunities when applying the standard.

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