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UK: BEIS guidance on mandatory climate reporting for UK companies and LLPs

The Department for Business, Energy & Industrial Strategy (BEIS) has published (non-legally binding) guidance to help publicly quoted companies, large private companies and limited liability partnerships (LLPs) understand how to meet the new mandatory TCFD-aligned climate disclosure requirements, which apply to reporting for financial years starting on or after 6 April 2022.

The requirements are set out in the Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022 and the Limited Liability Partnerships (Climate-related Financial Disclosure) Regulations 2022 (see here), which were made on 17 January 2022.

In-scope companies and LLPs will be required to include disclosures on climate change-related risks and opportunities, where these are material. The disclosures should cover how climate change is addressed in corporate governance; the impacts on strategy; how climate-related risks and opportunities are managed; and the performance measures and targets applied in managing these issues. 

The BEIS guidance provides answers to commonly asked questions, including:

  • Will disclosure be required at the group or subsidiary level?
  • Will UK companies be required to report on their global operations or just their UK operations?
  • Will UK companies with an overseas parent company be exempt?
  • What happens if a company or LLP does not comply with the disclosure requirements?
  • What do companies and LLPs have to disclose and what level of detail is required?
  • Where should a company or LLP make these disclosures?
  • Can a company or LLP rely on third party information to make these disclosures?
  • How do these regulations apply to companies that are also subject to the FCA's Listing Rules on TCFD disclosures?
  • How do the requirements in these regulations relate to the Streamlined Energy and Carbon Reporting (SECR) regime?

The guidance provides that the description of the actual and potential impacts should be "as granular as is necessary to understand the impact of crystallisation of that risk and should be specific". In describing the actual or potential impact, a business should consider both the actions that are being put in place now and contingency plans for actions which may be taken in the future. The guidance includes examples. 

In respect of climate scenarios, disclosures should enable a reader to understand which scenarios have been used, including (where appropriate) the source of those scenarios, and the effect that operating within that scenario would have on the current business model and strategy. Disclosures should also enable a user of the accounts to understand why a particular scenario has been chosen (for example, where the use of a particular scenario has become the industry norm).  

The government acknowledges that assumptions and estimates may be needed to complete scenario analysis. Businesses should disclose the assumptions and estimates that underpin the scenario analysis exercise. The government expects that the complexity and sophistication of the assumptions and estimates will grow over time as companies and LLPs become more familiar with carrying out scenario analysis. Where assumptions and estimates change year-on-year, the disclosures should enable a user to understand how and why they have changed. The government recognises that, initially, as the use of climate scenarios may be new to some businesses, there may be significant divergence in methodology, assumptions and estimates. However, it anticipates there will be natural convergence within industries as good practice emerges.  

Where a company or LLP has set targets to help assess its progress in managing climate-related risks and opportunities, the target should be properly explained. The disclosure should include a timeframe over which the company or LLP intends to meet those targets and how it monitors and assesses progress in meeting those targets. A number of influential investors have already warned that climate targets and having a credible climate transition plan for achieving those targets is something they will be scrutinising in detail this year.  

In terms of how the BEIS regulations interact with the FCA's new Listing Rules on TCFD reporting for premium and standard listed companies, the guidance states that the main difference between the requirements is that the FCA’s Listing Rules and accompanying guidance directly reference the TCFD’s recommendations, recommended disclosures and specified TCFD-published guidance materials, whist the BEIS regulations by contrast set out specific climate-related disclosure requirements that are aligned with the TCFD’s recommendations but do not directly reference these. Where a UK-registered listed company is subject to both sets of requirements, "disclosure in a manner consistent with all of the TCFD recommendations and recommended disclosures for the purposes of the FCA’s listing rule in its annual report is likely to involve use of similar information to the disclosures required by these regulations; therefore, it is normally likely to meet the requirements of these regulations".

For more information on climate reporting for UK companies, see:


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