Two-thirds of UK companies to incorporate climate change risks in annual reporting

Two-thirds (67 per cent) of UK corporates will be disclosing climate-related risks and opportunities in their 2019 annual reporting, according to figures released by the Carbon Trust.

Despite the mover to greater reporting, fewer than a quarter (23 per cent) of companies are expecting to report fully in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), yet the most commonly expected advantage from climate change disclosure in line with the TCFD recommendations is reputational, with seven in ten (72 per cent) believing that this reporting would increase brand value.

Overall, one third (31 per cent) of respondents see financial benefits, which is composed of improved access to capital (12 per cent), lower cost of capital (10 per cent), and strengthened credit rating (9 per cent).

Other perceived benefits include reduced shareholder pressure or activism (37 per cent), as well as attracting an increased diversity of investors (29 per cent). One-fifth (21 per cent) of business leaders think that improved climate change reporting will directly result in increased company valuation.

The survey was conducted by Ipsos MORI as part of its annual Captains of Industry research study, based on interviews with 100 board members from the UK’s top 500 companies.

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