UK Companies failing on climate change reporting

The majority of large companies in the UK are failing in adequately disclose how climate change will affect their business, with many potentially breaching the law.

ClientEarth conducted a comprehensive review which revealed a number of key findings, including that more than 90 per cent of the UK’s 250 largest listed companies make no reference to climate-related factors in their financial accounts, despite UK law requiring all large companies to disclose material information about their climate change-related risks and impacts.

To see how firms and auditors meet this demand, lawyers reviewed the entire FTSE 100 and the largest 150 companies on the FTSE 250, studied each company’s most recent annual report, and developed a quantitative assessment of how company disclosures match up against existing disclosure requirements.

Ass well as the 90 per cent of companies’ financial accounts and associated audit reports making no reference to climate change-related factors, 40 per cent of companies do not refer to climate change-related risk in the ‘principal risks and uncertainties’ section of their annual report and 15 per cent of companies still fail to disclose their Scope 1 and 2 greenhouse gas emissions.

However, even those companies that do mention Paris-alignment or net-zero targets, around half, many provide limited details – raising concerns of greenwash.

Daniel Wiseman of ClientEarth said: “It’s crystal clear that urgent action is needed to address the existing accountability gap for climate-related corporate reporting – continued failures to disclose material information to the market must have consequences. A handful of firms are doing the right thing, but the vast majority still have their head in the sand.”

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