Net Zero Disclosures

Published: 3 October 2023

2 minute read


As part of global efforts to combat climate change, companies are increasingly making commitments to reduce greenhouse gas (GHG) emissions. Targets to reach net zero or carbon neutrality are a subset of these. Investors and other stakeholders want to understand these commitments, and companies’ abilities to deliver against targets.

However, as noted in the FRC’s Environmental, Social and Governance (ESG) statement of intent, reporting is too often aspirational and high level. It frequently fails to provide users with sufficient information. Investors also continue to call for better information in financial statements, including connecting net zero targets to relevant disclosures. This was one of the five areas for improvement highlighted in the FRC’s Corporate Reporting Review’s (CRR) thematic review on the Task Force on Climate-Related Financial Disclosures (TCFD).

To understand net zero disclosures further, the Lab spoke with investors, companies and other stakeholders. In particular, we sought to understand:

  • how investors use disclosures on net zero or other GHG reduction commitments;
  • investor perspectives on current reporting, including good practice and areas for improvement; and
  • reporting challenges and successes for companies with these types of commitments.

During our discussions with investors and companies, we identified three elements of net zero commitments that investors want to understand from disclosures:

  1. Commitments: the level of ambition, scope, nature and timing of the commitment, and what is included and excluded.
  2. Impacts: how the commitment impacts strategy and business model, including information on transition plans, assumptions, uncertainties, and risks and opportunities.
  3. Performance: how performance is being measured in the short, medium, and long term. How high-quality data and accountability will be ensured, and actions management is taking in response to changes.

The full report is designed to be of use to reporting teams as they prepare disclosures on net zero and other GHG emission reduction commitments. Each section of the report explores investor needs (being those investors we spoke to for the project), highlights issues, interesting practice and practical questions for preparers to consider. The report also briefly explores company processes and provides tips from companies we spoke to for the project.

It is supported by a separate detailed example bank providing a number of practical examples of current good practice to help companies improve their disclosures.

“Companies are increasingly setting net zero targets. This report provides practical guidance to help companies effectively communicate what their commitments are, and what they mean for the business in the future.”

Philip Fitz-Gerald, FRC Lab Director


In addition to the full report and example bank, a summary of the key findings is also available.

Name FRC Lab Report: Net Zero Disclosures Report
Publication date 10 October 2022
Format PDF, 9.0 MB
Name FRC Lab Report: Net Zero Disclosures - Example Bank
Publication date 10 October 2022
Format PDF, 26.9 MB
Name FRC Lab Report: Net Zero Disclosures - Summary of findings
Publication date 10 October 2022
Format PDF, 5.2 MB