FRC welcomes Government’s plans to legislate following Non-Financial Reporting Review

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Published: 22 March 2024

The Financial Reporting Council (FRC) has welcomed the culmination of first phase of the government’s review of non-financial reporting requirements for UK companies, which aims to simplify the reporting framework as part of its Smarter Regulation agenda.

The FRC has been closely involved in this review, collaborating with the Department for Business and Trade on the recent call for evidence and ongoing stakeholder engagement programme. 

Key measures from this phase of the review include:

  • Removing certain duplicative and outdated reporting requirements from the Directors' Report to reduce overlap
  • Streamlining detailed remuneration reporting requirements that were not providing useful information
  • Increasing monetary thresholds for company size categories by approximately 50% to account for inflation and extend simpler reporting to more businesses

High-quality non-financial reporting provides useful transparency and accountability for investors and other stakeholders and most importantly is one of the ways UK companies can access capital. We support efforts to streamline and focus non-financial reporting on meeting the needs of investors efficiently.

Uplifting the size criteria will allow over 100,000 smaller UK companies to benefit from simpler, more proportionate non-financial and financial reporting regimes suited to their scale, balancing burdens on smaller businesses with reporting integrity. Revising the thresholds is an important first step in rationalising the framework.

Mark Babington, Executive Director of Regulatory Standards at the FRC

The FRC now looks forward to the Government’s amendments to the legislation to achieve greater consistency and comparability in the non-financial reporting landscape, including supporting the Government's intentions to align with future international sustainability disclosure standards.

FRC Director of Accounting and Reporting Policy, Jenny Carter, and Elisa Noble, a Senior Project Director in the Accounting and Reporting Policy team discuss the announcement and what it means for companies' reporting in our latest In-conversation podcast.