FRC reviews Climate-related Financial Disclosures (CFD) by AIM and large private companies
News types: Corporate Reports, Generic Announcement
Published: 21 January 2025
The FRC has today published a thematic review of Climate-related Financial Disclosures (CFD) by AIM and large private companies, following the first cycle of mandatory reporting.
CFD requirements were introduced for accounting periods beginning on or after 6 April 2022 and require companies to report on climate-related risks and opportunities if they have over 500 employees and are:
- traded, banking, insurance or AIM companies; or
- private companies or Limited Liability Partnerships, with turnover exceeding £500 million.
The review found that, while preparers have endeavoured to meet the CFD requirements, there was inconsistent quality among the companies selected. As a new requirement, this is the first time the FRC has carried out a review of this reporting, which aims to highlight key lessons for AIM and large private companies in scope of CFD requirements.
The publication sets out examples of good practice and identifies areas where preparers can provide more consistent, coherent and concise disclosures. The FRC recognises that reporting practices will continue to mature in subsequent years and our review can be used as a resource by preparers to support them as they continue to develop their climate-related disclosures.
Sarah Rapson, Executive Director of Supervision, said:
“As many AIM and large private companies continue to consider the impact of climate on their strategy, operations and people, the importance of robust frameworks that support preparers to assess risks and opportunities will continue to grow.
This review provides clear examples for preparers that will enable them to meet these new Companies Act requirements. As reporting continues to mature, this review will provide a benchmark for organisations to build upon.”