UK government issues climate disclosure guidance

Ahead of legal requirement in April 2022


Natalie Kenway

The UK government’s Department for Business, Energy & Industrial Strategy (BEIS) has issued climate reporting guidance to companies ahead of regulations coming into force on 6 April this year.

Last October, the BEIS announced reporting on the  Taskforce on Climate-related Financial Disclosures (TCFD) will become law in the UK from April 2022 following a consultation.

In the latest guidance, the department highlighted the importance of “material climate-related financial information” in helping support investment decisions as we transition to net zero, and noted the “physical and transition risks” climate change can have on the value of companies and their assets.

See also: – Climate-related disclosure roll-out begins

The government has recognised the recommendations of the Financial Stability Board’s (FSB) TCFD as “one of the most effective frameworks” for companies to “analyse, understand and ultimately disclose climate-related financial information”, and has placed a legal requirement on public and private companies to incorporate TCFD-aligned climate disclosures in their annual reports.

UK companies are expected to report at the group level but also include subsidiaries where activities are included within the consolidated group. UK operations run by international firms are also expected to comply.

The Financial Reporting Council (FRC) will be responsible for monitoring the contents of the reports and if a group does not comply, it has the power to make an application to the court for a declaration that the annual report and accounts of a company do not comply with the requirements of the Companies Act. Companies that believe they should be exempt are urged to check “the relevant facts” and take legal advice where appropriate.


Companies and LLPs are required to disclose how they are identifying, assessing and managing climate-related risks and opportunities, and how these are integrated into the overall risk management process of the business. The FRC also wants to see the time periods in which these area assessed and descriptions of actual and potential impacts of the climate-related risks and opportunities.

They will also need to make public an analysis of the resilience of the business model and strategy taking into consideration different climate-related scenarios, and provide targets to realise climate-related opportunities and performance against those targets.

“Disclosures of material climate-related financial information can help support investment
decisions as we move towards a low-carbon economy,” the document said. “As it becomes easier to compare companies’ exposures to climate-related risks and opportunities, investors will be better equipped to incorporate these risks into their investment and business decisions, and this also provides greater information to other stakeholders for relevant decisions.

“The preparation by businesses of disclosures on what the changing climate will mean for them, its impacts, risks, and opportunities, may help them gauge what they need to do to address these for their organisation, operations, and people.”

The department welcomes feedback on the latest guidance update by emailing comments to


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