Very few large companies in the U.K. are meeting requirements to disclose information on their strategies, employment diversity, and their effects on the environment, according to the accounting regulator and complaints from an environmental litigation organization.
Sustainability campaigners ClientEarth complained Sept. 19 to accounting regulator Financial Reporting Council (FRC) about four companies it said breach their duty to report to shareholders about climate change: easyJet Plc; Balfour Beatty Plc; EnQuest Plc; and Bodycote Plc.
The FRC says that companies are failing to give more details on non-financial areas such as diversity, company strategy, and corporate culture. Changes to the U.K.’s corporate governance code announced in July require companies to give more information on these non-financial areas beginning in 2019. The companies acknowledged their reporting responsibility, but denied they are failing to fulfill it.
ClientEarth lawyer Daniel Wiseman told BloombergTax by phone that the failure violated the companies’ legal duty to report material—financially significant—risks to shareholders. “For companies in exposed sectors, environmental issues are clearly material,” he said. “Investors expect them to be discussed just like any other risk to their capital.”
Source – Bloomberg