There is a great deal of inconsistency when it comes to Climate-related Financial Disclosures (CFDs) from large private companies and those listed on the Alternative Investment Market (AIM) exchange, according to a review undertaken by the Financial Reporting Council (FRC). While almost all companies provided disclosures, information was often missing and many of them were unstructured without specific cross-references, said the FRC. CFD requirements were introduced for accounting periods beginning on or after 6 April 2022. They require companies to report on climate-related risks and opportunities if they have more than 500 employees and meet certain conditions, such as trading on AIM or with a turnover exceeding £500 million. This is the first time that the FRC has carried out a review of CFD reporting. The FRC expects reporting practices to improve over time, with the review used to support the development of disclosures going forwards. “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,” said Sarah Rapson, Executive Director of Supervision.
