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Our latest Market Tracker Trend Report looks at reporting against the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and is essential reading for all premium listed commercial companies.

This comprehensive analysis of developments in this highly topical area looks at the TCFD-aligned climate-related financial disclosures made by 237 FTSE 350 companies (91 FTSE 100 companies and 146 FTSE 250 companies) in their 2022 annual reports. It provides an overview of the regulatory regime, examines how FTSE 350 companies have responded to the new reporting requirements and includes examples of best practice reporting. The report also includes commentary and practical guidance from leading practitioners in this area at Addleshaw Goddard, Gibson Dunn, Hogan Lovells and Travers Smith.

Topics covered include:

• an overview of the TCFD reporting requirements and related developments in climate change reporting
• analysis of the level of compliance with each of the TCFD recommendations
• in-depth analysis of the quality of reporting against each of the TCFD recommendations in FTSE 350 annual reports
• examples of ‘best practice’ reporting
• practical guidance when preparing TCFD disclosures

Key findings:

• 21% of companies stated that they had either not complied or had only partially complied with at least one of the TCFD recommended disclosures
• the most frequently omitted disclosures were under the Strategy pillar
• 63% of companies identified climate change as a principal risk and a further 14% identified it as an emergent risk that might evolve into a principal risk
• the most common time periods selected for reporting on climate-related risks and opportunities were 3-5 years for short term, 6-10 years for medium term and 10+ years for long-term
• 58% of companies linked executive remuneration to climate-related targets and a further 16% said they intended to amend their remuneration policies to include this
• 82% of companies made some form of net zero commitment, with the most common target date being 2050

The report contains expert commentary and practical guidance from a selection of well-respected practitioners in this field. Michelle Headrige and Charlotte Scrivens, Addleshaw Goddard, Selina Sagayam, Gibson Dunn, Danette Antao, Tom Brassington, Nicola Evans and Patrick Sarch, Hogan Lovells, and Sarah-Jane Denton, Travers Smith.