Regulations that will require publicly quoted companies, large private companies and limited liability partnerships to include climate-related disclosures in their strategic reports have been made.

The Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022 (SI 2022/31) and the Limited Liability Partnerships (Climate-related Financial Disclosures) Regulations 2022 (SI 2022/46) come into force on 6 April 2022 and will apply to accounting periods starting on or after that date.

Under the Regulations, in-scope companies and LLPs will be required to disclose climate-related financial information broadly in line with the Task Force on Climate-related Financial Disclosure (TCFD) Recommendations (which cover governance, strategy, risk management, and metrics and targets) and the TCFD Recommended Disclosures.

The Regulations will apply to UK incorporated:

  • companies that are currently required to produce a non-financial information statement (i.e. companies with more than 500 employees which are listed, or are banking or insurance companies);
  • AIM companies with more than 500 employees;
  • listed or banking LLPs with more than 500 employees; and
  • companies and LLPs which have more than 500 employees and a turnover of more than £500 million.

Our briefing on these requirements is available here.

Overlap with Listing Rule requirements

The requirements in the Regulations are in addition to the Listing Rule requirements, for both premium and standard listed companies, to report against the TCFD Recommendations and Recommended Disclosures on a "comply or explain" basis. For companies with a premium listing, the Listing Rule requirements apply for accounting periods beginning on or after 1 January 2021 and for standard listed companies, the requirements apply for accounting periods beginning on or after 1 January 2022. Our briefing on these requirements is available here.

Whilst the reporting requirements under the Listing Rules and the Regulations are broadly similar, there are areas of difference. It remains to be seen if either the Government or the Financial Conduct Authority will issue guidance on how compliance with one regime will be treated for the purposes of compliance with the other regime.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.