Companies are falling short of investors’ expectations for clearer reporting on climate-related issues, according to the UK’s Financial Reporting Council’s (FRC) Financial Reporting Lab.
The report, Climate-related corporate reporting, highlighted the gap between current reporting and investor expectations as economies increasingly transition towards low carbon futures.
Climate-related reporting outlines what investors want to understand, questions companies should ask themselves, recommended disclosures, and a range of examples of the developing practice of climate-related reporting.
While there are a number of frameworks that companies can use to report on climate-related issues, the Financial Reporting Lab has recommended that companies us the Task Force on Climate-related Financial Disclosures (TCFD) framework, as this was found to be well supported by participants and the UK Government expects all listed companies and large asset owners to disclose in line with the TCFD recommendations by 2022.
FRC CEO Jon Thompson said: “Investors are rightly demanding more information and greater transparency from companies on the challenges posed by climate change.
“As societal and investor expectations evolve, alongside the regulatory environment, it is clear companies need to rapidly increase their transparency and improve their reporting to meet this demand.
“The FRC itself recognises the need to play a more active role in this space and this report is an important step in recognising climate change as a priority and building on the FRC’s activities.”