Companies are failing to meet investors' expectations for clearer financial reporting on climate-related issues, according to a new report published by the Financial Reporting Council (FRC).
The FRC says that it is up to companies to 'close the gap between current reporting and investor expectations'. It has also warned that investors' requirements will increase as economies increasingly transition towards low carbon and climate-resilient futures.
Commenting on the report, Sir Jon Thompson, CEO of the FRC, said:'Investors are rightly demanding more information and greater transparency from companies on the challenges posed by climate change.
'As societal and investor expectations evolve alongside the regulatory environment, it is clear companies need to rapidly increase their transparency and improve their reporting to meet this demand.The FRC itself recognises the need to play a more active role in this space, and this report is an important step in recognising climate change as a priority and building on the FRC's activities.'
The FRC says it is providing guidance on how businesses can improve their reporting and disclosures. By 2022, the UK government expects all listed companies and large asset owners to disclose in line with the recommendations set out by the Taskforce on Climate-related Financial Disclosures (TCFD).