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

TRWG provides recommendations to the ISSB

14 Dec, 2021

The IFRS Foundation has made available a webcast that provides the Technical Readiness Working Group’s (TRWG) recommendations to the International Sustainability Standards Board (ISSB).

FRC announces thematic review and priority sectors for 2022/23

07 Dec, 2021

The Financial Reporting Council (FRC) has announced its corporate reporting and audit quality review programme for 2022/23 alongside its priority sectors for review.

Need to know — UK Government publishes Greening Finance: A Roadmap to Sustainable Investing

06 Dec, 2021

This Need to know discusses the UK Government’s Roadmap to Sustainable Investing, published in October 2021.

Governance in focus — On the board agenda 2022

03 Dec, 2021

As 2021 draws to a close, our annual review of board topics will stimulate your thinking and help prepare you for the year ahead. Across the board, expectations of business are rising and it is this demanding environment which shapes the articles in this year’s publication.

FRC Lab publishes its third newsletter for 2021

23 Nov, 2021

The Financial Reporting Lab of the Financial Reporting Council (FRC) has published its third newsletter for 2021 providing highlights of its activities.

FCA emphasises importance of compliance with new TCFD Listing Rule

18 Nov, 2021

The Financial Conduct Authority (FCA) has published Primary Market Bulletin 36 which focuses on the new Listing Rule (LR 9.8.6R(8)) requiring premium-listed companies to include a statement in the annual report confirming the extent to which they have made disclosures consistent with the Task Force on Climate-related Financial Disclosure (TCFD) Recommendations. This new rule comes into force for accounting periods beginning on or after 1 January 2021 with the first annual reports including those disclosures being published from January 2022.

FRC publishes a staff factsheet on climate-related matters for FRS 102 reporters

16 Nov, 2021

The Financial Reporting Council (FRC) has published a staff factsheet to inform preparers of annual reports under FRS 102 of climate-related matters they may need to consider when preparing financial statements and associated narrative reporting.

Governance in brief — FRC issues advice on annual reports for 2021/22 reporting season

11 Nov, 2021

The FRC issues advice on annual reports for 2020/21 reporting season

Purpose-driven Business Reporting in Focus — IFRS Foundation creates new board to set global sustainability standards

10 Nov, 2021

This edition of Purpose-driven Business Reporting in Focus discusses the IFRS Foundation’s (IFRSF) establishment of the International Sustainability Standards Board (ISSB) and explains the work programme of the IFRSF Technical Readiness Working Group. It also summarises two Prototypes on climate-related disclosure and general requirements that have been published by the IFRSF and sets out next steps, including considerations for companies and UK implications.

UK government publishes draft legislation on climate-related financial disclosures

05 Nov, 2021

The Department for Business, Energy & Industrial Strategy (BEIS) has published draft regulations requiring UK public interest entities, Alternative Investment Market (AIM) companies and high turnover companies and Limited Liability Partnerships (LLPs) to make climate-related financial disclosures. The regulations, which amend the Companies Act 2006, will take effect for periods commencing on or after 6 April 2022.

FCA publishes Discussion Paper on Sustainability Disclosure Requirements

04 Nov, 2021

The Financial Conduct Authority (FCA) has published Discussion Paper DP21/4 'Sustainability Disclosure Requirements and investment labels' (the DP).

UK Government publishes a factsheet around the UK becoming the world’s first Net Zero-aligned Financial Centre

03 Nov, 2021

The UK Government has announced that the UK will be the world’s first Net Zero-aligned Financial Centre.

IFRS Foundation creates new sustainability standards board

03 Nov, 2021

The IFRS Foundation has announced the creation of its new International Sustainability Standards Board (ISSB) that will develop a comprehensive global baseline of high-quality sustainability disclosure standards to meet investors’ information needs.

Climate-related disclosures prototype

03 Nov, 2021

The IFRS Foundation has released a climate-related disclosures prototype that is the proposal of the Technical Readiness Working Group (TRWG) for the first thematic standard of the ISSB.

Joint statement by the FCA, PRA, TPR and FRC on the publication of Climate Change Adaptation Reports 

01 Nov, 2021

The Financial Conduct Authority (FCA), Prudential Regulation Authority (PRA), The Pensions Regulator (TPR) and the Financial Reporting Council (FRC) have issued a joint statement on the publication of their Climate Change Adaptation Reports.

FRC Lab publishes a report on better practice TCFD reporting

01 Nov, 2021

The Financial Reporting Lab ("the Lab") has published a report to help companies prepare for mandatory Taskforce on Climate-related Financial Disclosures (TCFD) reporting.

ESMA announces enforcement priorities for 2021 financial statements

29 Oct, 2021

The European Securities and Markets Authority (ESMA) has announced the priority issues that the assessment of listed companies' 2021 financial statements will focus on. A special focus is on COVID-19 and climate-related disclosures.

EC event on sustainability reporting standards and the future of sustainability reporting

28 Oct, 2021

The European Commission (EC) organises a side event to COP 26 with the participation of the European Financial Advisory Reporting Group (EFRAG).

FRC publishes findings on the quality of corporate reporting in 2020/2021

27 Oct, 2021

The Financial Reporting Council (FRC) has published its Annual Review of Corporate Reporting 2020/2021. 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.

Annual report insights 2021 — Surveying FTSE reporting

26 Oct, 2021

Our latest annual reporting survey, Annual report insights 2021, provides insights into practices in annual reporting, focusing on areas where requirements have changed, where regulators are focusing or where innovative practices are emerging.

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