The UK’s Financial Reporting Council (FRC) set out Wednesday six challenges relating to ESG information that require action by the regulator.
The six areas covered in the FRC Statement of Intent on Environmental, Social and Governance Challenges are:
- Production: To ensure that better internal information leads to better decisions and better insight for stakeholders.
- Audit and assurance: So that the reported information is robust and reliable.
- Distribution: So that information is made accessible to interested parties.
- Consumption: To ensure this information leads to better decision-making by stakeholders.
- Supervision: So that information and activity is appropriately monitored and requirements are enforced.
- Regulation: To improve efficiency through coordinated and coherent regulation.
The FRC also issued a SASB Standards reporting framework snapshot, which shows the top three countries adopting the Sustainability Accounting Standards Board Standards: US (more than 521 companies), Canada (more than 89 companies), and the UK (more than 54 companies).
Of the UK companies using SASB Standards, 12% locate their disclosures in their annual report, 59% use a separate sustainability report, and 28% put them elsewhere.
In November, the FRC issued a statement on nonfinancial reporting that encouraged companies to report against the Task Force on Climate-Related Financial Disclosures’ 11 recommended disclosures and use SASB metrics to do so.
— Oliver Rowe (Oliver.Rowe@aicpa-cima.com) is an FM magazine senior editor.