The FRC’s review considered how a sample of companies and Limited Liability Partnerships (LLPs) had complied with the new SECR requirements, identified examples of emerging good practice and outlined its expectations for future reporting.

While the sample of reports largely complied with the minimum statutory disclosure requirements for emissions and energy consumption, more needs to be done to make these disclosures understandable and relevant for users.

In particular, entities need to explain more clearly how information is calculated, which operations and emissions are included in their reported numbers and the level of third-party assurance obtained over the information. They also need to consider how to integrate these disclosures with other narrative reporting on climate change, especially any emission-reduction targets.

Mark Babington, the FRC’s executive director of regulatory standards, said:  “Addressing the urgent impact of climate change requires clear and transparent reporting so that investors and users of accounts can make informed decisions.

“While it is encouraging that examples of good practice have emerged, companies need to do more to make disclosures understandable and relevant for users.

“Looking ahead, companies should carefully consider the findings of our review with a view to providing high quality information about current emissions, in the context of increasing focus on emission-reduction commitments and strategies.”