The Financial Reporting Council (FRC) has announced revisions to the UK Corporate Governance Code are intended to enhance transparency and accountability, but the new Code has come under fire for ignoring ESG concerns.

The FRC had signalled that it would not be considering ESG already, but the total absence of any mention has been marked, without even the briefest inclusion of concepts.

The FRC has prioritised revisions to the Code in the significant area of internal controls. After consultation on 7 November, the FRC dropped its earlier proposals for revisions to the Code related to the role of audit committees on environmental, social and governance issues; expanding diversity and inclusion expectations; over-boarding provisions, and expectations on committee chairs’ engagement with shareholders.

In part, the reasoning is that the FRC wishes to reduce changes and is intent on “keeping burdens on businesses to the minimum necessary amid concerns that the reporting requirements are already too heavy.

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