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Under new legislation which comes into force on 6 April 2022, UK companies with a ‘high turnover’ will be subject to new climate-related disclosure requirements for financial years starting on or after 6 April 2022.
“High turnover” is defined in the Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2021 (the Regulations), as it will amend the Companies Act 2006, as being companies with (i) an annual turnover of greater than £500m (on a consolidated basis) and (ii) more than 500 employees.
The Regulations require such ‘high turnover’ companies to include a non-financial and sustainability information statement in their strategic reports which accompany their annual accounts. The statement must contain the following climate-related financial disclosures:
These new reporting requirements under the Regulations are aligned with the recommendations of the Taskforce on Climate-related Financial Disclosures (the TCFD), published in its report of 2017. The TCFD was established by the Financial Stability Board in 2015 in order to improve and increase the reporting of climate related financial information.
Increased disclosure on these matters is intended to, in turn, increase the proportion of companies taking actions against climate-related risks and opportunities affecting their business, which is all part of the UK’s much wider transition towards net zero.
This publication is intended for general guidance and represents our understanding of the relevant law and practice as at January 2022. Specific advice should be sought for specific cases. For more information see our terms & conditions.
24 January 2022