The Financial Reporting Lab of the Financial Reporting Council (FRC) has published a report on developing practice in TCFD-aligned corporate reporting. The report reiterates investor expectations in relation to climate-related reporting and includes examples of best practice.
Key recommendations from the report include:
- Governance mapping – Companies should provide an overview of how each group or committee contributes to the overall assessment and consideration of climate-related issues.
- Risks and opportunities – Investors are looking for more nuanced reporting around risks and opportunities, featuring more information on likelihood, impact, prioritisation and time horizons.
- Performance against targets – Investors want to understand performance against targets by the business as a whole, not just small portions that are doing well. Companies should distinguish between “aims” or “ambitions” and more concrete objectives and policies which are being actively pursued.
- Climate-related scenario analysis – Investors remain very interested in climate-related scenario planning, and encourage an integrated discussion of how different scenarios might impact the company’s customers and suppliers, as well as the company’s strategy and performance.