Update to the Financial Reporting Council’s Guidance on the Strategic Report

Of interest to those responsible for the annual report

On 16 June, the Financial Reporting Council (FRC) published an updated edition of the Guidance on the Strategic Report to incorporate climate-related financial disclosures, following changes in legislation made earlier this year. In addition, a number of other amendments were also made to maintain alignment with legislation.

The FRC describes the guidance as “[serving] as a best practice statement and, as such, has persuasive rather than mandatory force. One of its objectives is to set out high-level principles that enable entities to ‘tell their story’…[it is] …intended to serve as best practice for all entities preparing strategic reports.”

“This Guidance relates to the Companies Act 2006 requirement to prepare a strategic report, which was brought in through the following regulations:

  1. The Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 (SI 2013/1970);
  2. The Companies, Partnerships and Groups (Accounts and Non-Financial Reporting) Regulations 2016 (SI 2016/1245);
  3. The Companies (Miscellaneous Reporting) Regulations 2018 (SI 2018/860);
  4. The Statutory Auditors Regulations 2017 (SI 2017/1164); and
  5. The Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022 (SI 2022/31).”

For entities within their scope, the new climate-related financial disclosures are effective for financial years beginning on or after 6 April 2022.

The update guidance (all 125 pages of it) can be found here.

ESG Summit: 2 May 2024 Download this year's course catalogue

Search CGI