UK Companies Make Positive Climate Reporting Progress

UK-based premium-listed companies have made “significant steps forward” in the quality of their climate-related reporting, according to two new reports by the Financial Reporting Council (FRC) and Financial Conduct Authority (FCA). Reviewing 25 large companies, the FRC report outlined that they were able to provide “many” of the Taskforce on Climate-related Financial Disclosure (TCFD) reporting requirements expected under the FCA’s Listing Rule and within their 2021 financial statements. However, the FRC noted areas for improvement, including further granularity on climate change impacts according to different sectors and geographies, as well as linking climate-related disclosures to the company’s risk management and governance processes. The FCA’s assessment of 170 companies (and an additional 30 more in-depth) also highlighted a “significant increase” in the quantity and quality of UK corporate climate-related disclosures, but added that it found instances where companies claimed their reporting is TCFD-aligned when this was not the case. Sacha Sadan, Director of ESG at the FCA, said: “We are pleased to see improvements in the completeness and consistency of disclosures with the TCFD framework, but there is clearly more to do. We will continue to work with companies, their advisors and the FRC as they further develop their disclosures. We are committed to driving higher standards in the financial industry and we also encourage companies to look ahead to the future implementation of reporting standards in development by the International Sustainability Standards Board.”

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