The Financial Reporting Council has issued a joint statement with the FCA, the BoE and the TPR welcoming the Government’s update to the Green Finance Strategy, which recognises the role of the financial sector in delivering global and domestic climate and environmental objectives to ensure the UK is a leading centre of Green Finance.
The FRC has stated that it continues to support the Government’s ambition to ensure that the UK is a leading Centre of Green Finance. The Boards of UK companies have a responsibility to consider their impact on the environment and the likely consequences of any business decisions in the long-term, and to continue to address impact of climate change (both direct and indirect).
The FRC has expressed its commitment to ensuring that reporting should set out how the company has considered the resilience of the company’s business model and its risks, uncertainties, and viability in both the immediate and longer-term considering climate change. Companies should also reflect the current or future impacts of climate change on their financial position, for example in the valuation of their assets, assumptions used in impairment testing, depreciation rates, decommissioning, restoration and other similar liabilities and financial risk disclosures.
FRC chief executive officer, Jonathan Thompson, commented: “We all need to play our part in the net zero transition and ensure that the economy is resilient and prepared for managing climate-related risks. As the regulator for company reporting and audit, the FRC will continue to hold organisations to account for transparent disclosures on their plans and actions to address climate risks and opportunities. Reliable information, free from greenwashing, and subject to high-quality assurance is critical both to public trust and the effective functioning of capital markets and the success of the Green Finance Strategy. We look forward to continuing our collaboration with other regulators in support of the UK’s ambitions.”