FRC plans common framework for 2023 

February 2, 2023

The UK’s Financial Reporting Council (FRC) has committed to developing a common framework for ESG reporting in the country over the coming year.  

The ‘FRC ESG Statement of Intent: What’s Next’ revealed the independent regulator will establish standardised requirements for developing and reporting climate transition plans later in 2023. 

The framework will build on the Taskforce on Climate-Related Financial Disclosures (TCFD) as well as work completed by the Transition Plan Taskforce (TPT).  

The FRC will also revise the Technical Actuarial Standards to ensure actuaries take into consideration climate and other ESG-related risks in their work.  

Reviews of the Guidance on the Strategic Report and UK Corporate Governance Code are also expected to take place in 2023. 

Updates to these reports will ensure companies are provided guidance to deal with changes in requirements and the growing importance of ESG reporting.  

Mark Babington, executive director of regulatory standards at the FRC, said: “Improving transparency on climate and wider ESG risks and opportunities, and related governance activities and behaviours, is a key priority for our work, benefitting all those stakeholders who demand decision useful reporting which underpins effective decision making in capital markets.” 

The report also revealed the FRC has completed several initiatives to develop practical guidance for ESG reporting in the 18 months since the ‘2021 Statement of Intent on ESG’. 

The FRC ESG Group was established to allow the FRC to respond to ESG challenges quickly and effectively to ensure stakeholder needs are met. 

The FRC’s Guidance on the Strategic Report has also been revised to incorporate guidance on climate-related financial risks and opportunities. 

The guidance is now in line with the TCFD and Streamlined Energy and Carbon Reporting (SECR) requirements.  

This comes as the FRC's sister regulator, the FCA, is praised for its exemplary efforts to prevent greenwashing. Together, the two appear to be leading the efforts for bringing the UK to the forefront of sustainable investing.