On this page, the Corporate Reporting Faculty provides an overview of current and future UK reporting requirements and signposts relevant practical guidance for preparers.
Current UK reporting requirements
Strategic report - general
Under UK law, all companies that are not small are required to provide an overview of their business, including a description of the principal risks and uncertainties facing the company, in a strategic report.
The strategic report should contain information that is material to shareholders and which helps them assess whether the directors have performed their duty to promote the success of the company. When the directors of a company consider a sustainability matter to be a principal risk or uncertainty facing the company, this should be disclosed in the strategic report.
Quoted companies and public interest entities (PIEs) with over 500 employees are also subject to specific reporting requirements on environmental matters within the strategic report, for example, details of policies pursued on environmental matters and the effectiveness of these policies. This information is required to the extent that it provides information that is necessary for an understanding of the development, performance, position (and impact - PIEs only) of the company's business. For more information about the strategic report, visit:
- The strategic report: purpose, content and best practice guidance
- The strategic report: scoping and content
Strategic report - s172 reporting
Large companies are required to include a statement in the strategic report which describes how the directors have performed their duty under section 172 of the Companies Act 2006. This duty requires directors to promote the success of the company for the benefit of its members as a whole, and in doing so have regard to the impact of the company’s operations on the community and the environment, among other matters.
For guidance and tips on preparing meaningful Section 172(1) statements visit:
For webinar recordings on UK regulation topics, including Section 172(1) statements, visit:
Strategic report - Climate-related Financial Disclosures
Mandatory climate-related financial disclosure requirements were introduced into UK legislation in 2022 for certain large companies and LLPs. The disclosures are required as part of the Non-Financial and Sustainability Information (NFSI) statement within their strategic report. LLPs not required to produce a strategic report should include the information in the Energy and Carbon report (see below).
The requirements are based on the Task Force for Climate-Related Financial Disclosures (TCFD) recommendations which encourage disclosure across four key areas: governance, strategy, risk management, and metrics and targets. Q&A-style guidance on the regulations, issued by the government, aims to help reporters understand how to meet the new requirements.
The FCA listing rules LR 9.8.6R and LR 14.3.27R require certain listed companies to include a statement in the annual report which sets out whether the company has made disclosures consistent with the TCFD framework. Many of these companies will also be subject to the climate-related financial disclosure requirements mentioned above. There is a high degree of consistency between the two sets of requirements as both are based on, or directly reference, TCFD recommended disclosures.
For more information, including practical guidance, visit:
- Factsheet: Climate-related Financial Disclosure Regulations
- Webinar: Introducing the Climate-related Financial Disclosure Regulations
- Two-part webinar series on Getting started with climate reporting
Directors' report - Streamlined Energy and Carbon Reporting
Large companies, quoted companies, and large LLPs are required to comply with streamlined carbon and energy reporting requirements (SECR). For companies, the associated disclosures must be included in the directors’ report. For LLPs, the associated disclosures must be included in the Energy and Carbon report which forms part of the annual report.
For more information about these requirements, visit:
Financial Statements
Companies must consider climate-related matters when applying accounting standards where their effect is material in the context of the financial statements as a whole. When climate-related matters are considered material, disclosures are required in accordance with those standards.
For further information for UK GAAP reporters, visit:
- By All Accounts article: Climate-related reporting in FRS 102
- FRC factsheet: Climate-related matters for FRS 102 reporters
For IFRS reporters, the International Accounting Standards Board has issued updated educational material:
By All Accounts
Exploring corporate reporting trends to help you navigate our changing profession.
Future UK reporting requirements
IFRS Sustainability Disclosure Standards
The International Sustainability Standards Board (ISSB) has issued its first two IFRS Sustainability Disclosure Standards:
- IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and
- IFRS S2 Climate-related Disclosures
The UK Government has repeatedly confirmed its intention to assess the suitability of the IFRS Sustainability Disclosure Standards for endorsement. Most recently, the Department for Business and Trade (DBT) issued an update in May 2024 that explained the Government aims to make the UK-endorsed ISSB standards available in Q1 2025 – these will be known as UK Sustainability Reporting Standards (UK SRS). The UK Government has indicated that once an endorsement decision is made, these standards will provide the basis for future obligations within company law and FCA listing requirements.
For more information about the ISSB and IFRS Sustainability Disclosure Standards, visit:
Transition plans
IFRS S2 includes a requirement for entities to disclose any climate-related transition plan it has. A transition plan is an aspect of an entity’s overall strategy that lays out the entity’s targets, actions or resources for its transition towards a lower-carbon economy.
Established by the UK Government in 2022, the Transition Plan Taskforce (TPT) has developed a Disclosure Framework for transition plans which provides a set of disclosure recommendations that an entity can use as guidance on how to report more effectively on the transition plan-related aspects of IFRS S2.
There are currently no requirements for entities to report against the TPT Disclosure Framework although the government has committed to consulting on the introduction of requirements for the UK’s largest private companies to disclose their transition plans if they have them, ensuring parity between listed and private companies.
For further explanation of the latest developments in disclosures on transition plans, visit:
UK Green Taxonomy
To address a lack of common definitions about ‘what counts as green’, the UK government is set to implement a UK Green Taxonomy. This taxonomy will clearly define the criteria which specific economic activities must meet in order to be considered environmentally sustainable and, therefore, ‘Taxonomy-aligned’.
The UK Government has indicated that once the UK Green Taxonomy has been consulted on and finalised, there will be a minimum two-year voluntary application period before the introduction of mandatory obligations. The government has not yet decided whether to introduce mandatory disclosures against the Taxonomy; with any decision on this being subject to further consultation.
Further resources
Other helpful resources from the Financial Reporting Council (FRC) include:
- FRC’s work on ESG and Climate related reporting
- FRC’s staff factsheet: Climate-related matters for FRS 102 reporters
- CRR Thematic review of climate-related metrics and targets (July 2023)
- CRR Thematic review of TCFD disclosures and climate in the financial statements (July 2022)
- FRC Lab Report: ESG data distribution and consumption (July 2023)
- FRC Lab Report: Improving ESG Data Production (August 2022)
