UK: The Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022

The Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022 were made earlier this week and come into force on 6 April: see here or here (pdf). The accompanying explanatory memorandum, available here (pdf), explains that the Regulations "... will require certain companies to report climate-related financial information in the Non-Financial and Sustainability Information statement which forms part of the Strategic Report. The information to be disclosed will be descriptions by the company of the climate-related risks and opportunities it identifies as material for its business; its governance and risk management approaches to these; how these risks and opportunities impact its strategy and business model; and the targets and performance indicators it applies to managing them" (para. 7.5). 

UK: The Limited Liability Partnerships (Climate-related Financial Disclosure) Regulations 2022

The Limited Liability Partnerships (Climate-related Financial Disclosure) Regulations 2022 were laid before Parliament today and come into force on 6 April: see here or here (pdf). Their purpose is to require certain large UK LLPs to report climate-related financial information in their Strategic Reports or Energy and Carbon Reports. Further information is available in the accompanying explanatory memorandum: see here (pdf).

UK: BEIS publishes environmental reporting guidelines

The Department for Business, Energy and Industrial Strategy has published updated environmental reporting guidelines, to reflect new reporting obligations coming into force today: see here. The guidelines are intended principally for those companies and limited liability partnerships subject to the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 and the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018.

UK: BEIS publishes updated guidance for the Companies (Miscellaneous Reporting) Regulations 2018

The Department for Business, Energy and Industrial Strategy has today published updated guidance concerning the Companies (Miscellaneous Reporting) Regulations 2018: see here. The Regulations contain several new reporting obligations including the requirement for certain large companies to include in their strategic report a "section 172(1) statement". This statement, to quote directly from article 4 of the Regulations, "describes how the directors have had regard to the matters set out in section 172(1)(a) to (f) when performing their duty under section 172 [of the Companies Act 2006]".

UK: FRC consults on updated Guidance on the Strategic Report

The Financial Reporting Council has published for consultation an updated edition of its Guidance on the Strategic Report: see here. The amendments take into account the increased disclosure obligations to which certain large companies are subject under the Companies, Partnerships and Groups (Accounts and Non-Financial Reporting) Regulations 2016, but also reflect the FRC's intention to strengthen the link between the purpose of the strategic report and the matters to which directors should have regard as part their duty to promote the success of the company under section 172 of the Companies Act 2006.

UK FRC best practice guidance on the strategic report

The Financial Reporting Council has today published best practice guidance in respect of the preparation of the strategic report: see here (pdf). The guidance is not mandatory but, according to the FRC, is intended to have persuasive force.

UK: FCA consults on proposed changes to the Listing Rules

The Financial Conduct Authority has published a consultation paper setting out consequential changes to the Listing Rules resulting from the Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013 and Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013: see here (pdf).

UK: FRC consults on strategic report guidance

The Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 make amendments to the Companies Act 2006 and require, amongst other things, certain companies to prepare a strategic report. The Department for Business, Innovation and Skills asked the Financial Reporting Council to prepare non-mandatory guidance in respect of the strategic report. Today the FRC published for consultation its draft guidance and stated its hope that the new reporting requirements would encourage the preparation of more concise and relevant narrative reports: see here (pdf).

UK: Company narrative reporting - implementing the new framework

Several statutory instruments relating to company reporting were published today, including the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013, the Companies (Revision of Defective Accounts and Reports) (Amendment) Regulations 2013 and the Companies (Receipt of Accounts and Reports) Regulations 2013. The first of these, through changes to the Companies Act 2006, sets out the new narrative reporting framework for companies, including the obligation to prepare a strategic report (there is, however, an exemption in place for small companies).

UK: The Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013

A draft of the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 was published yesterday: see here (pdf). The Regulations make amendments to existing legislation, including the Companies Act 2006, in order to implement the new narrative reporting regime for companies (including the preparation of a strategic report). The Regulations come into force on 1 October 2013.

UK: Government proposals for reforming the structure of narrative reporting

The Department for Business, Innovation and Skills has published for consultation a draft of the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 through which changes to the narrative reporting framework will be made: see here (pdf). Amongst other things, the Regulations introduce the requirement for companies to produce a separate Strategic Report in place of the Business Review currently found in the Director's Report (small companies will be exempt). The Regulations will require quoted companies to include in their Strategic Report information that is currently not required in the Business Review including, for example, a break down by gender of the number of directors, managers and employees within the organisation.

UK: Government consults on executive remuneration and outlines new narrative reporting framework

The Department for Business, Innovation and Skills published a couple of consultation papers today. The first concerns executive remuneration and is available here (pdf). In this paper the Government asks fifteen questions concerning the structure of remuneration, the role of remuneration committees, the role of shareholders and promoting best practice. Question one, for example, asks whether providing shareholders with a binding vote on remuneration would improve their ability to hold companies to account on pay and performance.

The second paper, unlike the first, contains specific proposals. It sets out the Government's proposals for a new narrative reporting framework: see here (pdf). The Government proposes that the current Directors' Report should be abolished and that quoted companies and medium and large companies should publish a Strategic Report (replacing the Business Review). All companies will be required to prepare an Annual Directors' Statement. Major changes are proposed with regard to the Directors' Remuneration Report, which will become part of the Annual Directors' Statement with important information moving to the Strategic Report. In addition, changes to what quoted companies must disclose with regard to remuneration are proposed, including more information on the relationship between pay and performance.