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FRC comment letter on the Phase 1 Report of the TCFD into reporting of climate related risks

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04 May 2016

The Financial Reporting Council (FRC) has published a comment letter on the Task Force on Climate-Related Disclosures (TCFD)’s Phase 1 Report into the reporting of climate related risks by companies.

The FRC welcome the steps taken by the TCFD to ensure that adequate consideration is given to the assessment of and reporting on the impacts of climate change. The FRC believes that the disclosure recommendations should apply to both financial and non-financial companies and stress that any disclosure recommendations made should be flexible to enable a company “to tell its story”. In order to not detract from the key messages in the annual report, the FRC encourage the TCFD to consider the placement of information outside the annual report when recommending disclosures that “might go beyond the needs of the annual report’s intended audience.”

Despite welcoming the steps taken by the TCFD, the FRC expresses concerns about the length of the consultation period and the ability of stakeholders to respond in a “considered and meaningful way”. This is particularly important given the fact that consideration of climate risks is still at the stage of breaking into mainstream business dialogue with few examples of good practice to date.

 The full comment letter is available on the FRC website.

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