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Reports, guides and regulation

This section features some of the key legislative/regulatory developments and changes, as well as any new reports or guidance issued by industry bodies or regulators, over the last month.

BEIS guidance on mandatory climate-related financial disclosures

Following the publications of its response to the consultation, the Government will be imposing mandatory climate-related financial disclosure requirements for the UK’s largest companies. The new rules, which include AIM-quoted companies with over 500 employees, will come into effect for accounting periods on or after 6 April 2022 and will require these companies to disclose their climate-related risk and opportunities in line with the Taskforce on Climate-related Financial Disclosures (TCFD) recommendations.

In light of this, the Business Department (BEIS) has issued non-binding guidance to help companies understand how to meet the new mandatory climate-related financial disclosure requirements under the Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022. The guidance includes an overview of the requirements and answers certain key commonly asked questions. A summary of this can be found below:

Overview of the new disclosure requirements

  • What are the requirements?

    • For certain publicly quoted companies to incorporate TCFD-aligned climate disclosures in their annual reports.
    • Companies within scope will be required to include disclosures on climate-related risks and opportunities, where these are material. The disclosures should cover how climate change is addressed in corporate governance; the impacts on strategy; how climate-related risks and opportunities are managed; and the performance measures and targets applied in managing these issues.
    • Companies should include these disclosures in what was previously the Non-Financial Information Statement (now the Non-Financial and Sustainability Information Statement) in the Strategic Report.


  • The disclosure requirements will apply to a company or LLP that meets the following scope criteria:

    • All UK companies that are currently required to produce a non-financial information statement, being UK companies that have more than 500 employees and have either transferable securities admitted to trading on a UK regulated market or are banking companies or insurance companies (Relevant Public Interest Entities (PIEs));
    • UK registered companies with securities admitted to AIM with more than 500 employees;
    • UK registered companies not included in the categories above, which have more than 500 employees and a turnover of more than £500m;
    • Large LLPs, which are not traded or banking LLPs, and have more than 500 employees and a turnover of more than £500m and;
    • Traded or banking LLPs which have more than 500 employees

  • Will disclosure be required at the group or subsidiary level?

    • Companies are expected to report at the group level (or at the company level if not included within consolidated reporting).

  • Will UK companies be required to report on their global operations?

    • When a UK group is in scope, the top UK parent is expected to report, within its Annual Report, on the global operations of the UK group.

  • Will UK companies with an overseas parent company be exempt?

    • There is an exemption from the disclosure requirements at company level where that company’s activities are included in a consolidated report and there is a UK parent company. Where a UK company has an overseas parent which reports on a consolidated basis, the exemption does not apply.

  • What happens if a company does not comply?

    • The FRC has the responsibility to monitor the contents of Strategic reports and the power to make an application to the court for a declaration that the annual report and accounts of a company do not comply. The court may then order the preparation of revised accounts.


  • When should companies start complying?

    • The regulations are applicable for accounting periods on or after 6 April 2022.

Reporting requirements under the Companies Act 2006

  • What do the regulations require companies to disclose?

    • A description of the governance arrangements of the company in relation to assessing and managing climate-related risks and opportunities;
    • A description of how the company identifies, assesses, and manages climate-related risks and opportunities;
    • A description of how processes for identifying, assessing, and managing climate-related risks are integrated into the overall risk management process in the company;
    • A description of the principal climate-related risks and opportunities arising in connection with the operations of the company and a description of the time periods by reference to which those risks and opportunities are assessed;
    • A description of the actual and potential impacts of the principal climate-related risks and opportunities on the business model and strategy of the company;
    • An analysis of the resilience of the business model and strategy of the company, taking into consideration of different climate-related scenarios;
    • A description of the targets used by the company to manage climate-related risks and to realise climate-related opportunities and of performance against those targets; and
    • The key performance indicators used to assess progress against targets used to manage climate-related risks and realise climate-related opportunities and a description of the calculations on which those key performance indicators are based.

  • What level of detail is required?

    • Disclosures should enable the reader to understand the information presented without needing to refer to other sources of information produced by the company. Disclosures should enable the reader to understand how the climate-related financial disclosures relate to the other information presented in the Annual Report.

  • Should the information be disclosed in a particular format or structure?

    • No – the regulations do not prescribe a particular format.

  • Can companies rely on third party support and what happens if information is subsequently found to be inaccurate?

    • Directors are responsible for the information disclosed, but may choose to use information that is generated by a third party in order to help them assess their climate-related risk. The legal duty to make the climate-related financial disclosures will, however, remain on the directors.

If you wish to view the guidance, please click here.

PLSA Stewardship and Voting Guidelines

On 23 February, the Pensions and Lifetime Savings Association published its Stewardship and Voting Guidelines for 2022. The guide is aimed at scheme investors, their investment service providers and companies interested in using our guidelines as a benchmark for their corporate reporting and investor relation work.

The key changes to the 2021 version are summarised below:

  • Virtual AGMs – the PLSA continues to support the use of virtual AGMs to ensure voter turnout and participation, which it notes has not decreased as a result of the switch to virtual meetings. However, the PLSA does note that virtual-only AGMs becoming a more permanent feature may reduce some opportunities for shareholder engagement.
  • Board composition and diversity – the policy on diversity has been amended to be a policy of diversity and inclusion, which should include characteristics such as gender and ethnicity, amongst others.
  • Remuneration – companies should demonstrate caution in remuneration packages in 2022, especially if they have previously received Government support over the last two years during the pandemic. The PLSA also welcomes the increased consideration of ESG performance metrics in remuneration.
  • Climate change – investors now expect that disclosure of climate risks are considered a priority and that companies should be referencing the TCFD framework.
  • Board leadership – companies should disclose how they are addressing issues posed by Covid-19 on the workforce.

If you wish to view the Guidelines, you may do so here.

FTSE Women Leaders Review

On 22 February, the FTSE Women Leaders Review published its first report on gender balance in FTSE leadership. The report includes a series of recommendations regarding the representation of women in FTSE companies, and also contains information on the current state of play.

The key findings of the report include:

  • Women held 39.1% of FTSE 100 board positions (up from 36.2% in 2020), but 15 FTSE 100 companies had not yet achieved the 33% target.
  • Women held 36.8% of FTSE 250 board positions (up from 33.2%), but 57 FTSE 250 companies had not yet achieved the 33% target.
  • Across the FTSE 350 there were only 48 women chairs (16 in the FTSE 100), 115 women SIDs (32 in the FTSE 100) and 18 women CEOs (8 in the FTSE 100). There were only 75 women executive directors (29 in the FTSE 100), being 12.3% of executive directors in the FTSE 350.
  • Across the FTSE 350 there were only 48 women chairs (16 in the FTSE 100), 115 women SIDs (32 in the FTSE 100) and 18 women CEOs (8 in the FTSE 100). There were only 75 women executive directors (29 in the FTSE 100), being 12.3% of executive directors in the FTSE 350.

The review also included a set of new recommendations, including:

  • An increased target of a minimum of 40% women for FTSE 350 boards by the end of 2025.
  • For FTSE 350 companies to have at least one woman in the chair or SID role on the board, and/or one woman in the CEO or FD role, by the end of 2025.
  • That key stakeholders set best-practice guidance to encourage FTSE 350 boards that have not yet achieved the 33% target to do so.

To view the report, please click here.

FRC on sustainability reporting

On 9 February 2022, the FRC published its response to the International Sustainability Standards Board (ISSB) on the prototypes published by the Technical Readiness Working Group to support the development of International Sustainability Standards.

In outlining their thoughts, the FRC states that it strongly supports the development of global standards for sustainability reporting and for the UK to adopt these standards. The FRC has also provided some recommendations to the ISSB, including that it should:

  • Provide stakeholders with an outline of the architecture of the standards;
  • Consider the four pillars of the TCFD in the context of the overall framework for narrative reporting; and
  • Discuss the extent to which governance reporting will be within the scope of the ISSB standards.

The FRC also includes some more detailed recommendations which are summarised below:

  • Use existing reviews of corporate disclosure and examples of best practice when setting standards to ensure they address any gaps in disclosure and build upon existing good practice
  • Further consideration is required about how these standards fit within and influence the future suite of standards, and how the ISSB will resolve the duplication and overlap of reporting requirements across topics.
  • The ISSB should ensure the climate-related disclosure standard is focussed on subject specific requirements that are applicable across sectors, and therefore consider how this standard, and future standards, are connected to and build upon the general requirements standard.
  • The industry specific metrics require amendments to ensure they are subject-specific.
  • Ensure the climate-related disclosure standard adequately addresses impacts and dependencies that influence an entity’s risks and opportunities and underpin value creation.

To view the FRC’s full response, please click here.

Government announces Brexit Freedoms Bill

The Government has announced its plan to bring forward a new “Brexit Freedoms” Bill to mark the two-year anniversary of Brexit. The intention of the Bill is to make it easier to amend or remove outdated retained EU law, which forms part of the Government’s wider plans to reform EU law. In making the reform, red tape will be cut for UK businesses, helping to ease regulatory burdens. This will help to ensure that rules and regulations reflect the UK’s own priorities and objectives, rather than adhering to EU laws that are a complicated compromise between 28 different member states.

The new legislation will ensure that changes can be made more easily, so that the UK can capitalise on Brexit freedoms more quickly. The Bill is also expected to end the special status that EU law still has within the UK’s legal framework. Officials across government are currently reviewing all EU retained laws to determine if they are beneficial to the UK.

To read more about the Bill, please click here.

New additions to accounting standards

At the end of January, the FRC published a new edition of UK and Ireland accounting standards. These editions reflect the amendments made since the previous editions were issued in 2018, as well as changes in Irish company law. The FRC has also revised editions of the Foreword to Accounting Standards and Overview of the financial reporting framework that reflect developments in accounting standards, legislation and regulation.

The documents the FRC has issued cover:

  • Foreword to Accounting Standards;
  • Overview of the financial reporting framework;
  • FRS 101 Reduced Disclosure Framework;
  • FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland;
  • FRS 103 Insurance Contracts;
  • Implementation Guidance to accompany FRS 103 Insurance Contracts;
  • FRS 104 Interim Financial Reporting; and
  • FRS 105 The Financial Reporting Standard applicable to the Micro-entities Regime.

The FRC states that a new edition of FRS 100 will be issued following changes to this standard later on in the year.

To view the new editions, please click here.

Articles, news and speeches

This section features relevant news, articles and publications for small and mid-size quoted companies that have been published in the last month.

FCA speech on enhancing the UK’s markets

In early February, Sarah Pritchard, Executive Director (Markets) at the FCA, delivered a speech at The Future of UK Financial Regulation Summit on enhancing the UK’s capital markets and the FCA’s role and priorities.

The speech addresses HM Treasury’s Future Regulatory Framework review, which proposes to give the FCA significant new rulemaking powers by transferring pieces of onshored legislation into the FCA’s Handbook. This is stated as being an opportunity to create a rulebook which meets the specific needs of the UK market, while ensuring that its high standards are maintained. As part of this, the FCA will incorporate the principles of long-term growth and international competitiveness into its objectives. Following the conclusion of the HM Treasury’s FRF review, the FCA will seek to adapt the regulatory system so that it continues to enhance the attractiveness of UK capital markets.

The speech also covers the steps the FCA has taken to improve the functioning of the UK listing regime through the Primary Markets Effectiveness Review. This Review built on many of the recommendations made by Lord Hill and has already introduced changes in relation to free float requirements, dual class share structures and SPAC listings. There are also many other topics that will be covered in the near future, including the work with HM Treasury on prospectus reform and a primary markets effectiveness discussion paper.

Finally, the speech also covers the topic of ESG (Environment, Social and Governance), highlighting the FCA’s own strategy in this area. The FCA’s ESG Strategy was published in November to coincide with COP26 and outlines the FCA’s intent to support positive change in the financial services sector. The FCA wants to advance the debate on sustainability and promote the development of the tools the industry needs to manage climate-related and wider sustainability risks, opportunities and impacts.

To view the full speech, please click here.

Surveys, projects and questionnaires

This section features surveys or questionnaires submitted by industry bodies or regulators that are relevant to small and mid-size quoted companies.

QCA ESG Project

The QCA is currently undertaking a project looking into the ESG practices of our members and small and mid-sized quoted companies in general, with a view to uncovering what we can do to help our membership in their ESG journeys. We would like to understand more about the needs and wants of our members in relation to ESG so that we can begin to establish how we can assist members as they address their ESG-related risks and opportunities.

If you would like to hear more about our project, or discuss your ESG programme, please get in touch with and

FRC Lab project on ESG data

The FRC Lab is inviting companies, service providers and investors to participate in a new project looking at how companies produce ESG data. The scope of this first project phase will be determined in conjunction with participants but is expected to cover:

  • what ESG data companies collect;
  • what methodologies companies use to measure ESG data;
  • what systems they use to collect and produce the data;
  • how they get comfort on the accuracy of the data; and
  • how they transform the data into useful external disclosure.

If you wish to find out more information about the project, you may do so here.

If you would like to participate in the project, you can email the Lab at:


This section provides an update of any recently submitted QCA consultation responses, as well as the consultation responses the QCA is currently drafting.

QCA policy consultation responses

The QCA has recently submitted responses to the following consultations:

  1. HM Treasury: Future Regulatory Framework Review (Submitted: 9 February 2022)

This consultation sets out the Government’s response to the initial review, making a series of proposals to deliver the intended outcomes of the FRF Review and build on the UK’s existing framework. The FRF Review includes a proposal to add new growth and international competitiveness objectives for the FCA, as well as a proposal for the principle of sustainable growth to be updated to reference climate change and net-zero economy.

Broadly, we supported HM Treasury’s FRF review, and in particular, the proposal to implement growth and international competitiveness objectives for the FCA. However, we stressed our belief that proportionality should also be hard-coded into the FCA’s objectives. We do not consider that proportionality is sufficiently embedded into the regulators’ principles and nor is applied consistently or rigorously. Adding a new proportionality objective would place it on a proper footing and ensure that the regulator is properly accountable and can be subjected to sufficient scrutiny.

To view the response, please click here.

  1. Takeover Panel: Miscellaneous Code Amendments (Submitted: 18 February 2021)

The Takeover Panel published a consultation on Miscellaneous Code Amendments. The consultation seeks views on proposed changes to various provisions of the Takeover Code. Some of the key proposed amendments include:

  • Requiring a publicly identified potential offeror to announce any minimum level it is obliged to offer to offeree company shareholders.
  • Restricting a mandatory offeror from obtaining additional interests in shares in the offeree company in the 14 days up to and including the unconditional date and the expiry of the acceptance condition.
  • Introducing a new Note 5 on Rule 9.5 to clarify the application of the look-back period for determining the minimum price of a mandatory offer.

Overall, we supported the changes to the Code proposed by the Takeover Panel as logical and helpful additions to the Code.

To view the response, please click here.

The QCA is seeking views on the below consultation(s):

  1. HM Treasury: Financial Promotion Exemption for High-Net-Worth Individuals and Sophisticated Investors (Deadline: 9 March 2022)

This consultation proposes to retain the Financial Promotion exemptions for high-net-worth individuals and sophisticated investors, but to update them in light of significant economic, social and technological changes. This includes the development of the online retail investment market, price inflation and pensions freedoms, which have eroded the value of the high-net-worth individual exemption thresholds over the last twenty years. This has resulted in a significant number of additional consumers who did fall in scope of the exemptions when they were first created in 2001 or when they were last updated in 2005. In light of this, HM Treasury is proposing that the exemptions are updated through the following means:

  • Increasing the financial thresholds for high-net-worth individuals;
  • Amending the criteria for self-certified sophisticated investors;
  • Placing a greater degree of responsibility on firms to ensure individuals meet the criteria to be deemed high-net-worth or sophisticated;
  • Updating the high-net-worth individual and self-certified sophisticated investors statements; and
  • Updating the name of the high-net-worth individual exemption.

  1. FRC: Draft Strategy, Plan and Budget 2022-25 (Deadline: 1 March 2022)

On 18 January 2022, the FRC set out its draft 3-year plan and budget for 2022-2025, which includes its preparation for the transition to the Audit, Reporting and Governance Authority. The draft plan contains a breakdown of the FRC’s intended expenditure for 2022-2023 and a summary of the expected trajectory costs and headcount for the following two years.

  1. UKEB: Regulatory Strategy 2022-23 (Deadline: 1 March 2022)

The UKEB has also released its Draft Regulatory Strategy for comment. The document sets out the UKEB’s strategic objectives and how it will measure its success. 

If you have any comments you wish to contribute to the above consultation(s), please get in touch with Jack Marshall, Senior Policy Adviser,


This section provides information on any upcoming events the QCA may be holding or relevant events that members may be interested in.

What’s next for the FRC Lab

The Financial Reporting Lab (the Lab), which was established by the FRC in 2011 to provide an environment where investors and companies can come together to develop solutions to reporting, recently marked its ten-year anniversary and is due to hold an event to discuss what’s next for the Lab. This will include a discussion on the reporting challenges of the future and what stakeholders can do to contribute to the Lab’s future programmes.

The event is due to take place on Wednesday 16 March 2022 at 4pm.

For more details, including on how to register, please click here.

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