UK: FRC's 2023 thematic review calls for clearer disclosure of companies’ transition to a low-carbon economy

On 26 July 2023, the Financial Reporting Council (FRC) published a thematic review, in which it assessed the climate-related metrics and targets disclosures of 20 premium and standard listed companies in their 2022 annual reports. The companies operated in four sectors: materials and buildings, energy, banks, and asset managers.

The Listing Rules require both premium and standard listed companies to report against the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) in their annual reports.

This thematic review follows the FRC's and FCA's reviews last year which identified climate metrics and targets disclosures as needing improvement (see our previous client briefing).

This year's findings highlight better reporting practice and include sector-specific as well as cross-sector findings. For more information on the FRC's key findings, see our client briefing. 

It will be of interest not just to premium and standard listed companies but also to large UK-listed and unlisted companies and LLPs who will be required to include TCFD-aligned climate-related disclosures in a non-financial and sustainability information statement in their strategic reports for financial years commencing on or after 6 April 2022.