Since the first Statement of Intent on Environmental, Social and Governance (ESG) published by the Financial Reporting Council (FRC) in 2021, it has undertaken a significant number of initiatives both in the UK and internationally. Targeted primarily to support its wide range of stakeholders and drive best practice in high-quality and comparable ESG reporting and disclosure.
On January 30, the FRC released an update to its 2021 Statement, identifying areas where ongoing challenges in ESG reporting persist. As demand for ESG information continues to evolve, the publication includes actions for preparers to produce decision relevant information ,and the FRC’s plans to participate with key players in the market to ensure that stakeholder’s expectations are being met.
To provide cross-FRC thinking, responses to ESG challenges and allow the FRC to act more quickly and effectively the FRC formed an advisory body, the FRC ESG Group in 2022.
The report also makes reference to the FRC’s primary areas regarding ESG reporting which include projects and thematics on -
- ESG Data - how and where to find it and use it effectively
- Materiality disclosures – what should be considered when determining what are material issues?
- Support for FRS102 Preparers
- What are the ESG reporting requirements of the Corporate Governance Code?
- The link between investors and ESG reporting
Mark Babington, Executive Director of Regulatory Standards at the FRC, said:
"I am delighted that the FRC is today updating its very well received ESG Statement of Intent. Since we issued it in 2021, the FRC is proud to have produced a wide range of helpful tools, information and guidance that reflects the breadth of the FRC’s remit as well as the fast-evolving landscape of ESG and sustainability reporting globally.
Statement of Intent highlights the ongoing challenges and opportunities of producing ESG reporting and disclosures and where the FRC’s focus in 2023 will continue to provide guidance and examples of best practice, both in the UK and internationally.
Improving transparency on climate and wider ESG risks and opportunities, and related governance activities and behaviours, is a key priority for our work, benefitting all those stakeholders who demand decision useful reporting which underpins effective decision making in capital markets.”