For general regulatory and financial reporting, international accounting standards were a crucial step to making disclosure mandatory and to achieving high-quality, consistent and comparable disclosures. Developing consistent international reporting standards for climate risks that can be adopted into national law as widely as existing financial and regulatory reporting rules have been, would yield benefits across the UK economy.
It is vital that PRA-regulated firms are able to accurately identify and manage climate-related financial risks, which, in turn, requires that firms’ customers and counterparties make available accurate information on their own climate risks. Disclosures of climate-related financial risks is therefore most useful where it permits comparison within and across sectors and is consistent over time, as this means it can be more reliably used as a basis for decision-making. Given the linkages between UK organisations and the global economy, it is also important to be able to compare UK organisations both against one another and also relative to those in other jurisdictions.
We welcome the consideration given to this topic by the IFRS Foundation and, together with the other members of the Government–Regulator Taskforce, have published a joint statement in support of the IFRS Foundations proposals.