Accounting Standards

FRC sets ESG reporting plan of action

Due to the rising regulatory change, the organisation has highlighted six key areas that contain underlying issues regarding ESG information

The Financial Reporting Council (FRC) has outlined the necessary action needed to be taken for environmental, social, and governance (ESG) reporting.

The body’s statement of intent targets areas in which there are issues with ESG information when companies report in a way that meets the demands of stakeholders, how to meet these demands, and the FRC’s plans in this area.

Due to the rising regulatory change, the organisation has highlighted six key areas that contain underlying issues regarding ESG information.

In turn, the FRC has called for better production to ensure that internal information leads to a higher level of decisions and thus insight for stakeholders, and better audit and assurance to make reported information “robust and reliable”.

Increased distribution would enable information to become accessible to interested parties, while better consumption would lead to “better decision making by stakeholders”.

Finally, increasing the level of supervision and regulation would, according to the FRC, allow for the appropriate monitoring and enforcement of requirements, and lead to efficiency respectively.

To work towards a more effective system in all six categories, the FRC claimed it would work “work within its remit and with standard setters, regulators, market participants”, and others in order to “build a system that is forward-looking and fit for purpose”.

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