IASB issues podcast on latest Board developments (October 2019)

31 Oct, 2019

The IASB has released a podcast, featuring IASB Chair Hans Hoogervorst and Vice-Chair Sue Lloyd as well as communications team member Kasia Gilewska, to discuss the deliberations at the October 2019 IASB meeting and other developments.

The 19-minute podcast features discussions related to financial instruments on the following topics:

  • Amendments to IFRS Standards as a result of the second phase of the IBOR project.
  • Work on the accounting model that will enable investors to understand a company’s dynamic risk management.
  • Timeline for the financial instruments with characteristics of equity project.
  • Developments in the management commentary project.
  • The predecessor approach being considered by the Board for the accounting for combinations of businesses under common control.

The podcast can be accessed through the press release on the IASB website. More information on the topics discussed is available through our comprehensive notes taken by Deloitte observers at the October IASB meeting.

FRC publishes findings on the quality of corporate reporting in 2018/2019

30 Oct, 2019

The Financial Reporting Council (FRC) has published its Annual Review of Corporate Reporting 2018/2019, which provides the FRC's assessment of corporate reporting in the UK based on evidence from a variety of sources, including the work of the FRC's own Corporate Reporting Review (CRR) team.

In announcing the publication, the FRC commented:

The FRC expects companies to improve the quality reporting of forward-looking information, the potential impact of emerging risks on future business strategy, the carrying value of assets and the recognition of liabilities. Failure to report on these crucial areas undermines trust in business and can lead to the conclusion that management is either unaware of their potential impact, is being opaque, or is not managing them effectively. 

In times of uncertainty, investors and other stakeholders expect greater transparency of the risks to which companies are exposed and the actions they are taking to mitigate the impact of those uncertainties. The FRC expects companies to think beyond the period covered by their viability statement and identify those keys risks that challenge their business models in the medium to longer term and have a particular focus on environmental issues.

The report is structured around the FRC’s overall assessment of corporate reporting and in particular focuses on those areas which fall within the remit of the FRC’s reviews: the financial statements and the strategic report. It provides findings for the year, highlights where the FRC see room for improvement and sets out the FRC’s expectations for the coming reporting season.

Alongside the Annual Review the FRC has also published a letter to Audit Committee Chairs and Finance Directors in advance of the 2019/20 reporting season on key areas that need to be considered in the preparation of forthcoming annual reports and accounts. Those key areas are drawn from, and are consistent with, the findings included in the FRC’s Annual Review of Corporate Governance and Reporting.

Financial Statements

The FRC observes that the frequently raised issues this year were very similar to those raised last year; in particular questions continued to be raised with respect to the adequacy of key accounting judgements and estimates disclosures, aspects of the strategic report, alternative performance measures and cash flow reporting. Whilst the FRC highlights that “…generally reporting has improved” and that “more companies appear to be getting more of the basics right” it does suggest that there is still “scope for improvement”. The most significant findings of the FRC relating to financial statements include:

  • Judgements and estimates companies make in the preparation of their accounts.   The FRC indicates that this is “still the most frequent area of questioning”. Most companies are now clearly distinguishing between judgements and estimates and there were fewer instances of boilerplate disclosure. The FRC also found that there were fewer cases where matters were not disclosed as key judgements or areas of significant estimation uncertainty in the financial statements despite indicators to the contrary elsewhere in the annual report.

However, similar to last year, the area of most frequent challenge was in relation to lack of, or inadequate, sensitivity analysis or information about the range of possible outcomes for areas of estimation uncertainty. Specific areas of estimation uncertainty where there was a lack of sensitivity analysis included impairment reviews, pension assets and liabilities, uncertain tax positions and onerous contracts.

The FRC also questioned estimation uncertainties “which did not appear to give rise to a significant risk of material adjustment to the related balances within the next year”. The FRC encourages “companies to be mindful that the judgements and estimates disclosed are those with the greatest potential effect on the financial statements”.  

  • Consolidation adjustments. The FRC questioned consolidation judgements, specifically the question of control over another entity. Questions focused around:
    • The control of trusts;
    • the determination of joint control in a situation where one party holds a majority of voting rights;
    • de facto control, in a situation where a company and its associate have several directors in common; and
    • the point at which control passed with a “locked box” arrangement.

The FRC indicates that “companies need to have a full understanding of the rights and obligations – both contractual and constructive – arising from their arrangements, in order to assess the criteria for control of another entity and determine correctly whether or not it should be consolidated. This may be particularly relevant in situations such as a joint arrangement where the rights arise from contractual, rather than voting, rights”. The FRC encourages companies to disclose the nature of these judgements made in accordance with IAS1:122 where material.

  • Cash flow statements. A “significant number of questions” were raised in this area. The FRC notes that many of the errors identified were basic commenting that “it remains a concern that companies’ own quality control procedures and those of their auditors are failing to spot such matters”.  The most common errors were in relation to misclassification of cash flows between operating, investing and financing activities:
    • Examples of cash flows incorrectly included within investing included:
      • Fees received from associates and joint ventures
      • Restructuring and post-acquisition integration costs
      • Purchase and sale of rental fleet assets
    • Examples of cash flows incorrectly included within operating included:
      • Disposal of investments in joint ventures
      • Non-trading advances to joint ventures
    • Examples of cash flows incorrectly included within financing included:
      • Repayments of loans to joint ventures
  • Additionally the FRC challenged companies where:
    • additions and disposals of assets held under finance leases were presented as cash flows;
    • dividends from associates and joint ventures were not presented separately;
    • there were unclear captions providing insufficient explanation of cash flows presented;
    • basis for inclusion or exclusion of amounts such as overdrafts and current asset investments within cash and cash equivalents was not clear; and
    • there was difficulty in reconciling movements in working capital balances to the amounts shown in the reconciliation of cash flows from operating activities.

The FRC draws attention to its recent Lab report Disclosures on the Sources and Uses of Cash which companies should use to help them improve disclosures as to how cash is generated and used linking to strategy and priorities for that cash.

  • Supplier financing arrangements. The FRC continues to raise concerns about the adequacy of disclosures provided to explain supplier financing arrangements although it does indicate that there has been “an increase in both the number and quality of disclosures”.   The FRC expects disclosures in this area to contain:
    • An explicit statement to confirm reverse debt factoring is not used;
    • The accounting policy applied;
    • Whether the liability to suppliers is derecognised;
    • Whether the liability is included within KPIs such as net debt;
    • The cash flows generated by such arrangements; and
    • The existence of any concentrations of liquidity risk which could arise from losing access to the facility.
  • Income taxes. There were fewer cases where the FRC challenged whether there should have been a tax effect reported in the financial statements for matters such as provisions and share-based payments. There were also fewer instances where companies were challenged on the allocation of tax effects between profit or loss and equity. However, the FRC did challenge companies whose descriptions of adjusting items in the tax reconciliation were not specific enough to enable a reader to understand their nature.
  • Provisions and contingencies. The FRC challenged companies’ disclosures relating to provisions – either they were missing or unclear or were not consistent with information disclosed elsewhere in the annual report. There were a number of instances of “inadequate disclosure” including:
    • Releases of provisions netted against increases in provisions;
    • Movement due to change in discount rate inconsistent with discount rates disclosed; and
    • Lack of disclosure of the uncertainties about the amount and timing of cash flows.
  • Fair value measurement. The FRC raised concerns about the application of IFRS 13 especially regarding the disclosure of the valuation techniques and inputs used for fair value measurements categorised within levels 2 and 3 of the fair value hierarchy, including quantitative information about the significant unobservable inputs used. Companies were also challenged where fair value hierarchy disclosures were not provided for all fair values disclosed or, where they were provided, companies were challenged if they were inconsistent with disclosure elsewhere. These challenges were predominantly in relation to the fair value measurement of financial instruments including derivatives.
  • Thematic reviews. The FRC published the results of three thematic reviews in relation to IFRS 9 Financial Instruments, IFRS 15 Revenue from Contracts with Customers and the impairment of non-financial assets on 10 October 2019. The FRC draws attention to the messages from these reviews. A thematic review looking at the initial application of IFRS 16 Leases will also be published shortly. The report, published today, includes preliminary findings of the areas of common weaknesses identified from that review.

Strategic reports

The FRC’s specific challenges to companies in this area were principally on:

  • the identification, description and mitigating actions taken to manage principal risks and uncertainties;
  • the comprehensiveness of business reviews; and
  • disclosures relating to alternative performance measures (APMs).

In relation to business reviews the FRC “frequently identified instances where significant balances or transactions had not been discussed or adequately explained in the strategic report”. The report includes a number of examples of areas that the FRC would expect to see discussion in the business review such as significant impairment charges or bad debts, performance of businesses acquired in the year, significant changes in working capital balances including trade receivables, trade payables and accruals, movements in provisions. Significantly, the FRC expects to see significant cash flows or changes in cash flows discussed.

In relation to APMs the FRC encourages all companies to comply with the European Securities and Markets Authority’s (ESMA’s) Guidelines on Alternative Performance Measures. The FRC notes improvements in:

  • the labelling of APMs with fewer adjusted measures given potentially misleading titles
  • fewer instances of undue prominence of APMs compared with IFRS compliant performance measures; and
  • explanations as to why APMs are used.

However, notwithstanding the improvements, the FRC continues to see:

  • Absent or unclear definitions of APMs and/or reconciliations to the closest equivalent IFRS line item;
  • Unclear reasons as to why certain amounts are excluded from adjusted measures that seemed to be part of normal business;
  • Instances of companies describing activities as non-recurring which had been reported for a number of years.

The FRC also commented that an “apparent reluctance to identify and highlight the audited IFRS numbers from which APMs are derived is a cause for concern.”

Other key areas of FRC focus include

  • Climate change – The FRC draws attention to its recently issued statement setting out its expectations of companies in relation to reporting on climate change and also the Lab report in this area. Companies should, where relevant, report on the effects of climate change on their business (both direct and indirect). Challenges were made of companies where the business model appeared to give rise to significant climate risk but no disclosures were made to that effect in the annual report. The FRC highlight that boilerplate disclosure should be avoided, commenting that companies who make such disclosures can expect “cursory or boilerplate disclosures to be challenged”.
  • Brexit – in previous years the FRC had reported that development of focused disclosures in this area has been “patchy”. The FRC is encouraged that companies now appear to be providing specific risks related to Brexit in the their annual reports along with mitigating actions that they have been able to take to address them. Almost all companies reviewed by the FRC with UK or EU operations referred to the risks of Brexit in their viability statements.
  • Non-financial information statement – the FRC found that whilst most companies reviewed made references to non-financial reporting matters in their annual report, the disclosures were “sometimes generic”. The FRC will continue to challenge companies where it feels that disclosures “fall short of the requirements” including the requirement to present the information in a separately identifiable non-financial information statement (although cross-referencing to the strategic report is acceptable). The FRC letter to Audit Committee Chairs and Finance Directors indicates that the statement should contain:
    • A clear description of the company’s policies.
    • Any due diligence processes implemented in pursuance of those policies and their outcomes in respect of environmental, social, anti-corruption and anti-bribery matters, employees and respect for human rights.
  • Section 172 reporting – the FRC encourages Board to disclose:
    • the issues, factors and stakeholders that they consider relevant in complying with s172(1) and the basis on which they came to that view;
    • the main methods they have used to engage with stakeholders and to understand the issues to which they must have regard; and
    • information about the effect of that regard on the company’s decisions and strategies during the financial year.
  • Dividends and distributable reserves – the FRC challenged companies that had paid interim dividends in excess of the distributable profits shown in their latest published financial statements. It reminds public companies of the need to file interim financial statements prior to a distribution being made if the most recent annual accounts do not show sufficient profits.

A slide deck of technical findings (see link below) from the CRR during the year has also been published, which gives more detail on the areas challenged by the Panel. The Annual Review of Corporate Reporting does not cover an assessment of corporate governance. Later this year, a separate report will be published which will assess early adoption of the new UK Corporate Governance Code, reporting on the 2016 Code and expectations for reporting in 2020.

The press release, full report, Technical findings 2017/18 and the letter to Audit Committee Chairs and Finance Directors can be obtained from the FRC website.  Our related Governance in brief publication is available here.

FRAB minutes for April and June 2019 meetings released

28 Oct, 2019

The minutes of the Financial Reporting Advisory Board’s (FRAB’s) meeting of 4 April 2019 and 13 June 2019 have been made available on the HM Treasury website

The role of the Financial Reporting Advisory Board (FRAB) is “to ensure that government financial reporting meets the best possible standards of financial reporting by following Generally Accepted Accounting Practice (GAAP) as far as possible”. The FRAB includes representatives from the accountancy profession in the private and public sectors, academia and government bodies. The board meets regularly to consider proposed changes to policy and practice.

Key topics discussed during the April meeting included updates on:

  • The IFRS 16 Leases implementation project.  Topics discussed were subsequent measurement of the right-of-use asset and the methodology that would be applied to discounting lease liabilities.
  • The government financial reporting review.
  • The Chartered Institute of Public Finance and Accountancy (CIPFA) and the Local Authority (Scotland) Accounts Advisory Committee (LASAAC) local authority code development.
  • The IFRS 17 Insurance Contracts implementation project with a summary of the first IFRS 17 technical working group meeting.
  • The FRAB 2018-19 annual report.

Key topics discussed during the June meeting included updates on:

  • The FRAB 2018-19 annual report.  The Board approved the FRAB report with a few suggestions.
  • The publishing of the 2017-18 Whole of Government Accounts.
  • The development of the 2020-21 CIPFA/LASAAC Code.
  • The forthcoming guidance on IFRS 16 and an update on IFRS 17
  • The recent work of the International Public Sector Accounting Standards Board (IPSASB)
  • Brexit and the disclosures that departments should be making in annual reports and accounts
  • The steps arising from the Government Financial Reporting Review including thematic reviews of IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers.

The minutes and other supporting documents for the April meeting are available on HM Treasury website here.  The minutes and other supporting documents for the June meeting are available on HM Treasury website here.

FRC publishes ‘Key Facts and Trends in the Accountancy Profession'

28 Oct, 2019

The Financial Reporting Council (FRC) has published the seventeenth edition of its annual ‘Key Facts and Trends in the Accountancy Profession’ publication.

The publication provides key data on the accounting profession, its member bodies and practising firms. The publication illustrates the size and shape of the accounting profession and shows how it has evolved over the years. It brings to together information about the major audit firms and seven accounting bodies including both those who offer audit qualifications and those who register and supervise audit firms.

The publication includes:

  • information related to membership, students, income, costs and staffing of the seven accountancy bodies;
  • information related to the supervision of statutory auditors;
  • information on the registered audit firms with public interest entity clients and;
  • a greater focus on the profession's track record on diversity and inclusion.

A press release and the full publication are available on the FRC website.

Updated IASB work plan — Analysis (October 2019)

25 Oct, 2019

Following the IASB's October 2019 meeting, we have analysed the IASB work plan to see what changes have resulted from the meeting and other developments since the work plan was last revised.

Below is an analysis of all changes that were made to the work plan since our last analysis on 1 October 2019.

Stan­dard-set­ting projects

  • Primary Financial Statements — Exposure draft is expected in December 2019 (previously fourth quarter of 2019).

Main­te­nance projects

  • 2019 Comprehensive Review of the IFRS for SMEs Standard — the request for information is now expected in the first quarter of 2020 (previously fourth quarter of 2019)
  • Accounting Policies and Accounting Estimates — dis­cus­sions on the project direction happened in October 2019 (previously fourth quarter of 2019).
  • Onerous Contracts — Cost of Fulfilling a Contract (Amendments to IAS 37) — An IFRS amendment is expect in the first half of 2020.

Research projects

  • Dynamic Risk Management — core model will occur in December 2019 (previously fourth quarter of 2019).
  • Financial Instruments With Characteristics of Equity — decision on the project’s direction will occur in the first quarter of 2020 (pre­vi­ously fourth quarter of 2019).
  • Pensions Benefits That Depend on Asset Returns — Research review is expected in December 2019 (previously fourth quarter of 2019).
  • Post-Implementation Review of IFRS 10, IFRS 11 and IFRS 12 — This project is now under research (previously listed under maintenance projects).
  • Provisions — Research review is expected in January 2020 (previously fourth quarter of 2019).
  • Subsidiaries That Are SMEs — Research review is expected in January 2020 (previously fourth quarter of 2019).

Other projects

  • IFRS Taxonomy Update — Interest Rate Benchmark Reform (Amend­ments to IFRS 9, IAS 39 and IFRS 7) —a proposed IFRS Taxonomy Update was issued in October 2019. Feedback update is expected in December 2019.

The above is a faithful com­par­i­son of the IASB work plan at 1 October 2019 and at 25 October 2019. For access to the current IASB work plan at any time, please click here.

October 2019 IASB meeting notes posted

25 Oct, 2019

The IASB met on Tuesday 22 and Wednesday 23 October 2019. We have posted our comprehensive Deloitte observer notes for all projects discussed during the meeting.

Implementation matters:

  • Onerous Contracts: For the planned amendments to IAS 37 the Board decided to replace the examples proposed in the ED with a clarification that the costs that relate directly to the contract consist of both the incremental costs of fulfilling that contract and an allocation of costs that relate directly to fulfilling that and other contracts.
  • PPE—Proceeds before intended use: The Board decided that the forthcoming amendments to IAS 16 will be effective for periods beginning on or after date 1 January 2022 and require retrospective application, but only for PPE made available for use on or after the beginning of the earliest period presented in the financial statements in which an entity applies the amendments. The amendments will prohibit the deduction of the proceeds from testing PPE, before it is capable of operating in the manner intended by management, from its cost.
  • Sale of a single asset entity containing real estate: The Interpretations Committee referred an issue involving the sale of an entity that has only one asset (real estate) and whether it should be in the scope of IFRS 10 or IFRS 15. The Board asked the staff to provide more analysis so that the Board can assess whether it should make a narrow scope amendment to IFRS 10 or IFRS 15.  

Business Combinations under Common Control: The Board decided that, when applying a predecessor approach for a business combination under common control: the acquirer should recognise and measure assets and liabilities at the carrying amounts included in the financial statements of the transferred entity (rather than at the amounts included in the consolidated financial statements of the common controller); and that the acquisition would be accounted for prospectively—i.e. the comparative information of the acquirer would not be adjusted.

Management Commentary: The Board decided that the revised Practice Statement state that the enhancing qualitative characteristics of comparability, verifiability, and understandability are relevant to management commentary along with guidance on how to apply those characteristics, but decided not to include timeliness as a qualitative characteristic. The Board also began its discussions of the business model. 

Accounting Policies and Estimates (amendments to IAS 8): The Board decided to finalise the proposed amendments to the definition of accounting estimates but not amend the definition of accounting policies.

SME Standard Review and Update: The Board decided that the RFI ask whether the IFRS for SMEs Standard should be updated to align the definitions of Section 15 with IFRS 11 by aligning the definitions of ‘control’ and ‘joint control’ (but not the recognition and measurement requirements) and retain three categories (i.e. jointly controlled operations, jointly controlled assets, jointly controlled entities).

Financial Instruments with Characteristics of Equity: The Board has decided to develop amendments to IAS 32 to address practice issues, clarify the underlying principles in IAS 32 and develop additional application guidance. The Board discussed the overall objectives of the project and the project timetable, which could lead to an Exposure Draft in 2021.

Dynamic Risk Management: The Board discussed the outreach plan, which focuses on assessing the viability and operability of the DRM model and whether it will reflect an entity’s risk management strategy. The outreach will focus exclusively on financial institutions and aim to provide feedback to the Board by June 2020.

Subsidiaries that are SMEs: The Board decided that when it tailors the disclosure requirements for subsidiaries that are SMEs if there is no recognition and measurement difference between full IFRS and IFRS for SMEs they will use the disclosures in IFRS for SMEs. If there is a recognition and measurement difference, they will consider the principles in BC157 of the IFRS for SMEs Standard and adapt the disclosures if supported by one of the principles.  

IBOR Reform and the Effects on Financial Reporting: The Board decided to amend IFRS 9 to clarify that an entity should apply the IBOR practical expedient first, by updating the effective interest rate based on the alternative benchmark rate, and then apply IFRS 9 current requirements (but not with an illustrative example). In the context of the IBOR reform, the Board concluded that the current requirements in IFRS 9 provide an adequate basis to determine if any other modifications to that financial instrument are substantial, and propose no other amendments to IFRS 9.

Amendments to IFRS 17 Insurance Contracts: The Board discussed an update on feedback from outreach.  

Please click to access the detailed notes taken by Deloitte observers for the entire meeting.

FRC publishes a revised UK Stewardship Code

25 Oct, 2019

The Financial Reporting Council (FRC) has published a revised UK Stewardship Code (“the Code”).

The new Code sets higher expectations for investor stewardship policy and practice and focuses on how effective stewardship delivers sustainable value for beneficiaries, the economy and society

The Code is voluntary and sets an aspirational standard beyond minimum regulatory requirements in the UK. The Code now comprises 12 ‘apply and explain’ Principles for asset owners and asset managers, with reporting expectations relevant to their role. In addition, there are six, separate ‘apply and explain’ Principles for service providers with reporting expectations.

An organisation applying to become a signatory to the Code will need to provide a Stewardship Report that sets out how they have applied the Code Principles in the preceding 12 months. This must include reporting on the activities they have undertaken, and the outcomes achieved. For the organisation to be listed as a signatory on the FRC’s website, the Report will need to meet the reporting expectations set out in the new Code.

Key changes in the new Code include:

  • An extended focus that includes asset owners, such as pension funds and insurance companies, and service providers as well as asset managers. This is intended to help align the approach of the whole investment community in the interest of end-investors and beneficiaries.
  • A requirement to report annually on stewardship activity and its outcomes. Signatories’ reports will show what has actually been done in the previous year, and what the outcome was, including their engagement with the assets they invest in, their voting records and how they have protected and enhanced the value of their investments.
  • Signatories will be expected to take environmental, social and governance factors, including climate change, into account and to ensure their investment decisions are aligned with the needs of their clients.
  • Signatories are now expected to explain how they have exercised stewardship across asset classes beyond listed equity, such as fixed income, private equity and infrastructure, and in investments outside the UK.
  • Signatories are required to explain their organisation’s purpose, investment beliefs, strategy and culture and how these enable them to practice stewardship. They are also expected to show how they are demonstrating this commitment through appropriate governance, resourcing and staff incentives.

The 2020 Code takes effect for reporting years beginning on or after 1 January 2020.

Additionally the Financial Conduct Authority (FCA) has published a feedback statement to its joint discussion paper entitled ‘Building a regulatory framework for effective stewardship’.  The feedback statement is available on the FCA website

Please click for the following additional information on the FRC website:

Please click here for the following additional information on the FRC website:

for the following additional information on the FRC website:

Accountancy Europe recommends revising the EU Non-Financial Reporting Directive

23 Oct, 2019

Accountancy Europe has released a call to action recommending five steps to revise the Non-Financial Reporting Directive and strengthen non-financial reporting requirements in Europe.

Accountancy Europe recommends:

  • Expanding the scope of the Non-Financial Reporting Directive beyond large public listed entities;
  • Indicating a minimum set of mandatory reporting criteria;
  • Requiring companies to disclose their non-financial information in the annual management report;
  • Introducing minimum reporting criteria for forward-looking disclosures; and
  • Ensuring the reliability of reported information.

Please click to access the call to action on the Accountancy Europe website.

Summary report on the roundtable on the future agenda and feedback statement on the agenda consultation of the European Lab

23 Oct, 2019

As part of its consultation on the future agenda of the European Corporate Reporting Lab, the European Financial Reporting Advisory Group (EFRAG) held a roundtable on 10 September 2019.

The summary report reveals that of the three future project topics proposed (A) reporting of social matters and human rights; (B) reporting of non-financial risks and opportunities, and linkage to the business model; and (C) reporting on the materiality assessment process and outcomes for Environment, Social and Governance (ESG) matters), the audience ranked (B) the highest (77%), followed by (C) (58%) and (A) (subdivided into three subtopics supported by 7%-19%). Please click to access the full report on the EFRAG website.

In its October meeting, the European Lab Steering Group evaluated feedback from 51 constituents across 15 jurisdictions and decided that project (B) will be the next project on its agenda.

FCA publishes feedback statement on climate change and green finance

22 Oct, 2019

The Financial Conduct Authority (FCA) has published a Feedback Statement (FS 19/6) on climate change and green finance.

The Feedback Statement, which summarises the responses received to its Discussion Paper 18/8, sets out the FCA's planned next steps in the move towards a greener economy.

In particular, the statement confirms that the FCA plans to issue a consultation paper in 2020 which will propose new disclosure requirements for certain issuers aligned with the Task Force on Climate-related Financial Disclosure's (TCFD’s) recommendations on a 'comply or explain' basis and clarify existing disclosure obligations relating to climate change risks. The FCA also plans to:

  • finalise proposed rule changes requiring Independent Governance Committees to oversee and report on firms’ environmental, social and governance (ESG) and stewardship policies by the end of 2019;
  • publish a feedback statement in response to a joint Discussion paper with the Financial Reporting Council (FRC) on Stewardship setting out actions to address the most significant barriers to effective stewardship; and
  • challenge firms on potential greenwashing, and take appropriate action to prevent consumers being misled.

The Feedback Statement is available on the FCA website.

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