FRC and FCA have published two reports which found that premium listed companies have made significant steps forward in the quality of climate-related information provided in their financial reports, but further improvements are needed.
Since 2021, premium listed commercial companies have been required to include a statement in their annual financial report, setting-out whether they have made disclosures consistent with the TCFD recommendations.
FRC’s report found that there was a range of maturity in companies’ disclosures. FRC reviewed 25 larger companies more impacted by climate change and found that companies were able to provide many of the TCFD disclosures expected by the FCA’s Listing Rule, and climate-related reporting in the financial statements, marking a significant improvement in comparison with previous years.
FCA confirmed in its report, that it was encouraged by the overall improvement in the completeness and consistency of disclosures with the TCFD framework following our regulatory intervention.
FCA reviewed 170 companies at a high level and 30 companies in more detail, and similarly found a significant increase in the quantity and quality of companies’ climate-related disclosures. However, it also found instances where companies said that they had made disclosures consistent with the TCFD’s recommended disclosures when it appeared they had not. It is considering these cases in more detail and may take action as appropriate.
Companies should take account of the TCFD’s Guidance for All Sectors when determining the consistency of their disclosures with the TCFD framework. The FCA also reminds companies of other guidance provisions included in its Listing Rules.