On 28 October, the FRC's Financial Reporting Lab (Lab) published a report which provides practical guidance to companies for the purposes of reporting against the Task Force on Climate-related Disclosures (TCFD) recommendations.  Alongside this report, Lab also published a snapshot showing the current status of TCFD disclosures in the UK.  

It is now mandatory for premium-listed companies to make TCFD disclosures (on a 'comply or explain' basis) in their annual reports for accounting periods beginning on or after 1 January 2021.  The FCA and BEIS have consulted on whether to extend this requirement to standard-listed and large private companies respectively. 

The report refers to the FRC's Climate Thematic Review, published in November 2020, which set out a number of questions for companies to consider when making TCFD disclosures, in order to meet investor needs. 

In recent years, an increasing number of companies have started making TCFD disclosures on a voluntary basis. For the purposes of this report, Lab has surveyed the content of such companies' disclosures and identified some examples of better reporting practice. These examples are set out in the report, along with analysis of how they satisfy investor needs and address the relevant questions set out in the Climate Thematic. The companies include National Grid plc, ITV plc, Persimmon plc and Unilever plc.   

It is noted that reporting on scenarios (forward-looking disclosures required under the 'Strategy' pillar of the TCFD) is particularly important for investors, but also an area of "weaker disclosure".  The FRC and Alliance Manchester Business School have published a research paper on climate scenario analysis and the report contains a link to this paper. 

The Government has a roadmap to mandating TCFD disclosures across the UK economy by 2025.