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

EFRAG briefing on climate-related risks in the financial statements

14 Sep, 2023

The Secretariat of the European Financial Reporting Advisory Group (EFRAG) has published a briefing paper to contribute to the debate on climate-related risks in the financial statements.

IOSCO will roll out extensive capacity-building programme on sustainability reporting

14 Sep, 2023

The International Organization for Securities Commissions (IOSCO) has released the transcript of a key note address given by Jean-Paul Servais, Chair of the IOSCO Board, at the Eurofi 2023 Financial Forum in Santiago de Compostela.

Governance in focus — On the board agenda 2023: Autumn regulatory update

13 Sep, 2023

This autumn, macro topics once again dominate, with boards focusing on forecasting demand and pricing, supply chain disruption, other input cost pressures and challenges in attracting and retaining talent. On top of these areas, there continue to be many moving parts in the governance landscape and reform agenda, and so this Autumn Regulatory Update is designed to meet two objectives: - provide a status update on the regulatory landscape boards need to navigate, and - help you set the agenda for the remainder of the year. We recognise that you have many important business topics on the agenda, but as you plan your board and audit committee agendas for the remainder of 2023 we hope you find this publication useful. To help you explore topics further we provide links both to Deloitte and external source materials.

G20 Leaders welcome issuance of ISSB standards

12 Sep, 2023

The G20 has issued final declaration following the G20 Leaders meeting held in New Delhi on 9–10 September 2023.

FSB calls ISSB standards culmination of TCFD work

06 Sep, 2023

Ahead of their meeting on 9-10 September 2023, a letter of the Chair of the Financial Stability Board (FSB) was submitted to G20 Leaders outlining the work the FSB is undertaking on enhancing the resilience of the financial system to structural change.

FCA confirms its approach to implementing UK-endorsed ISSB standards into its disclosure rules and highlights what listed companies can do now to prepare for any future reporting under those standards

14 Aug, 2023

The Financial Conduct Authority (FCA) has published Primary Market Bulletin 45 (the Bulletin) which sets out its approach to implementing UK-endorsed IFRS S1 and IFRS S2 into its disclosure rules, highlights what listed companies can do now to prepare for any future obligations relating to reporting on the International Sustainability Standards Board’s (ISSB’s) standards and explains how it will continue to supervise listed companies’ existing Task Force on Climate-related Financial Disclosures (TCFD).

UK Government publishes guidance on its framework to create UK Sustainability Disclosure Standards

07 Aug, 2023

The UK Government has published guidance on its framework to create UK Sustainability Disclosure Standards (UK SDS) confirming that the Secretary of State for Business and Trade will consider the endorsement of the IFRS Sustainability Disclosure Standards to create UK SDS by July 2024.

European Commission adopts final delegated regulation with regard to ESRS

31 Jul, 2023

The European Commission has adopted the final delegated regulation supplementing the European Accounting Directive as regards sustainability reporting standards.

Corporate Reporting Insights: Climate Transition Plan Disclosures

27 Jul, 2023

Corporate Reporting Insights (CRI) helps boards navigate new disclosure requirements, emerging practices, and growing expectations for greater transparency and accountability.

HM Treasury publishes TCFD-aligned disclosure application guidance

26 Jul, 2023

HM Treasury has published guidance on applying the Task Force on Climate-related Financial Disclosure (TCFD) recommendations in central government and, where appropriate, the wider public sector. The guidance applies to reporting periods from 2023-24.

FRC publishes thematic review findings on climate-related metrics and targets disclosures

26 Jul, 2023

The Financial Reporting Council (FRC) has published a thematic review assessing the quality and maturity of climate-related metrics and targets disclosures.

Accounting roundup — July 2023

26 Jul, 2023

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

IOSCO endorses ISSB standards

25 Jul, 2023

The International Organization of Securities Commissions (IOSCO) has announced that, in a major step towards consistent, comparable and reliable sustainability information, it has decided to endorse the sustainability-related financial disclosures standards, issued in June 2023 by the International Sustainability Standards Board (ISSB).

Need to know — Areas of Focus for Corporate Reporting (July 2023)

24 Jul, 2023

This Need to know sets out financial reporting issues that may be relevant in view of the current economic and geopolitical environment and also highlights areas of regulatory focus and recent changes in accounting standards. The topics contained within this publication will be relevant to all companies preparing annual reports and accounts, including June 2023 half-yearly reporters. This Need to know should be read in conjunction with Closing Out 2022 which contains additional topics for UK entities to consider including areas of regulatory focus and reporting expectations highlighted by the Financial Reporting Council (FRC) in its latest Annual Review of Corporate Reporting and its most recent thematic reviews.

Comparison of IFRS S2 with TCFD recommendations

24 Jul, 2023

The IFRS Foundation has compiled a comparison of the requirements in IFRS S2 'Climate-related Disclosures' and the TCFD recommendations.

Deloitte comment letter on the draft methodology for improving the international applicability of the SASB standards

21 Jul, 2023

We support the proposals to prioritise a narrow scope of work to internationalise the SASB Standards as necessary. In undertaking this exercise, we encourage the ISSB to consider the needs of the many entities that already report using the SASB Standards and avoid, to the extent possible, the need for entities to have to revisit the disclosure they already made. More generally, we consider industry-specific considerations to be an integral part of reporting on sustainability-related risks and opportunities. Therefore, notwithstanding our support for the proposals in the ED, we think it is essential that the ISSB sets out a vision for the eventual architecture of its standards, which should include industry-specific requirements alongside general requirements and topical standards, together with a strategy to bring industry-specific requirements formally into the ISSB’s standards.

UK Sustainability Disclosure TAC issues call for evidence

21 Jul, 2023

The Financial Reporting Council (FRC), in its role as secretariat to the UK Sustainability Disclosure Technical Advisory Committee (TAC), has issued a call for evidence to inform the proposed endorsement of the IFRS Sustainability Disclosure Standards in the UK.

FRC to host event on the UK Corporate Governance Code Consultation

21 Jul, 2023

The Financial Reporting Council (FRC) will be hosting an event on feedback received so far from the ongoing consultation on the UK Corporate Governance Code.

FSB progress report on addressing climate-related financial risks

17 Jul, 2023

The Financial Stability Board (FSB) has submitted to the G20 Finance Ministers and Central Bank Governors its second annual progress report on the July 2021 roadmap to address climate-related financial risks.

Accountancy Europe calls for ESRS to be aligned with ISSB standards before adoption

11 Jul, 2023

Accountancy Europe has commented on the draft delegated regulation regarding sustainability reporting standards released for comment by the European Commission in June 2022. Main points in the response are aligning the European Sustainability Reporting Standards (ESRS) with the ISSB standards before adopting the delegated act and ensuring consistency between ESRS and other EU legislation.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.