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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

Assessing financial statement materiality of climate-related and other emerging risks

13 Dec 2018

The Australian Accounting Standards Board (AASB) has published 'Climate-related and other emerging risks disclosures: assessing financial statement materiality using AASB Practice Statement 2'.

Recent sustainability and integrated reporting developments

04 Dec 2018

A summary of recent developments at CDSB/CDP, CDP, PRI/ICGN, UNEP FI, GRI, and the University of Oxford.

SASB issues industry-specific sustainability accounting standards

08 Nov 2018

The US Sustainability Accounting Standards Board (SASB) has issued the world's first set of industry-specific sustainability accounting standards covering financially material issues in 77 industries. The standards aim at providing investors with in-depth information about the impact of a company’s actions on society and the environment - they come at a time of increased investor concern about companies' business practices.

Reporting on climate risk gains traction but still lacks financial impact analysis

27 Sep 2018

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

Financial Reporting Lab calls for new participants for a new project on climate and workforce reporting

19 Sep 2018

The Financial Reporting Lab (“the Lab”) is calling for participants for its next project on the disclosure of climate change and workforce information. The project will look at how the Lab’s recommendations in previous reports on business model reporting, risk and viability and performance metrics apply to companies’ reporting on client change and their workforce. It will look at how climate and workforce disclosures can be reported most effectively.

Recent sustainability reporting developments

25 Jul 2018

A summary of recent developments at the UNEP FI, WBCSD, GRI/PRI/UN Global Compact and CDSB.

Recent sustainability and integrated reporting developments

11 Jul 2018

A summary of recent developments at the CDSB, CDSB/WBCSD, IIRC, GRI, and CDP.

Recent sustainability reporting developments

23 May 2018

A summary of recent developments at the WBCSD, TCFD/CDSB, CDSB, ICAEW, UNEP FI, and GRI.

ICAEW publishes guidance on how best to implement the TCFD's recommendations

17 May 2018

The Institute of Chartered Accountants in England and Wales (ICAEW), in association with the Carbon Trust, have published a practical guide on how organisations can best implement the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

Independent report explores how TCFD recommendations should be implemented in the UK

06 Apr 2018

In September 2017, the government asked Sir Roger Gifford to chair an independent taskforce (“the Green Finance Taskforce”) to accelerate growth of green finance and the UK’s low carbon economy. The Green Finance Taskforce has now produced a report that sets out a series of recommendations on how the government and the private sector can work together to make green finance and integral part of the UK’s financial services.

Recent sustainability and integrated reporting developments

19 Mar 2018

A summary of recent developments at the CDSB/CDP and FSB.

UNEP FI and investors to form leadership group to promote climate transparency by the investor community

19 Mar 2018

The UN Environment Finance Initiative (UNEP FI) together with nine investors from six countries have formed a leadership group to promote climate transparency by the investor community.

Use of financial accounting standards to meet TCFD recommendations

12 Mar 2018

The Climate Disclosure Standards Board (CDSB) has published 'Uncharted waters: How can companies use financial accounting standards to deliver on the TCFD’s recommendations?'. The publication explores how companies can use existing international accounting standards when implementing the Task Force on Climate-related Financial Disclosures (TCFD) recommendations and comes out as the European Commission calls for the review of current IFRS to assess their potential impact on sustainable investment.

Recent sustainability and integrated reporting developments

22 Dec 2017

A summary of recent developments at WBCSD, GRI and TCFD/CDSB.

The Bruce Column — Ensuring Climate-related financial disclosure goes mainstream

18 Jul 2017

The final Report of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures has now been published. Our regular columnist Robert Bruce reports on its recommendations and how it is likely to move this issue into the mainstream.

Need to know — Task Force on Climate-related Financial Disclosures issues its final report

06 Jul 2017

This newsletter discusses the final report recently issued by the Task Force on Climate-related Financial Disclosures. The recommendations aim to provide investors, asset owners, asset managers, lenders and insurance underwriters with consistent climate-related financial disclosures that are useful in understanding material climate-related risks.

TCFD published final recommendations on climate-related financial disclosures

29 Jun 2017

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 its final recommendations for effective disclosure of climate-related financial risks.

Robert Bruce interviews — Explaining the issues around climate-related financial disclosures

05 Apr 2017

As Special Advisor to the Financial Stability Board’s Climate-related Financial Disclosures Task Force, the body which produced the Bloomberg Report, Russell Picot is at the forefront of efforts to encourage the disclosure of climate risks in annual reports. Robert Bruce, our regular, resident columnist has interviewed him and reports on the latest progress.

Recent sustainability and integrated reporting developments

16 Feb 2017

A summary of recent developments at the CDSB, LSEG and Deloitte.

Thinking allowed — Climate-related disclosure

15 Feb 2017

This publication looks at some of the issues involved and how companies and audit committees might respond to the challenges, drawing on a report issued by the FSB Task Force on Climate-related Financial Disclosure, to integrate the implications of climate change in their corporate reporting effectively.

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