Climate related financial disclosures for large companies in the UK

On 19 January 2022, The Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022 (Regulations) were published which make climate-related financial disclosures mandatory for certain publicly quoted companies, banks, insurance companies and large private companies.

The Regulations come into force on 6 April 2022 and apply in respect of financial years beginning on or after that date.

The Limited Liability Partnerships (Climate-related Financial Disclosure) Regulations 2022 were also published on the same date, which make these disclosures mandatory for certain limited liability partnerships.

On 22 February 2022, the government published non-binding Q&A guidance on how to apply the new requirements.

Which companies are in scope?

The Regulations apply to:

• UK companies with more than 500 employees and which have either transferable securities admitted to trading on a UK regulated market or are banking companies or insurance companies (namely those UK companies that are currently required to produce a non-financial information statement);

• UK registered companies with securities admitted to AIM, and which have more than 500 employees; and

• UK registered companies not included in the categories above, which have more than 500 employees and a turnover of more than £500 million (high turnover companies).

The government hopes this will lead to the development of best practice, to assist smaller companies that may want to disclose on a voluntary basis.

See our insight for more information on the new rules for companies.

See also Mandatory climate-related financial disclosures for certain LLPs.