FRC: Opportunities for future UK digital reporting – Feedback Statement

On 15 May 2025, the Financial Reporting Council (FRC) published a Feedback Statement summarising its responses to the Discussion Paper “Opportunities for Future UK Digital Reporting”, which was issued on 13 August and closed on 1 November 2024 (see further here).

In the Discussion Paper the FRC sought feedback on various topics related to the use of XBRL taxonomies and structured digital formats for corporate reporting.  This is in light of the potential modifications that could be made to the current digital reporting requirements in the FCA’s Disclosure Guidance and Transparency Rules (DTRs) for listed companies post Brexit, given the possibility of diverging from European reporting requirements, as well as the power provided to Companies House by the Economic Crime and Corporate Transparency Act 2023 (ECCTA) to mandate digital filing of company accounts via its Registrar’s Rules. As a result, the FRC and other regulators (including Companies House, the FCA and HMRC) are considering significant and substantial changes regarding their digital filing requirements. 

Responses to the Discussion Paper included the following:

• The technical methodology is not as important as reducing the complexity and costs of digital reporting for preparers.
• The trade-offs between meeting UK-specific reporting requirements (whether stemming from legal or technical requirements) and maintaining comparability (both between all UK companies, listed and non-listed, and internationally), were highlighted, especially when considering changing established technical approaches, but responses were split on the benefits and burdens of these trade-offs
• Some recognised the value of assurance as a tool to improve trust and data quality in digital reporting, but others were concerned about costs, proportionality, and the burden on smaller entities. Some suggested phased or proportional implementations to support the transition to digital reporting, while others stressed the importance of defining materiality specific to tagging and, where relevant, to ensure assurance processes use, or align with, existing auditing or assurance frameworks (e.g. ISAE 3000).
• Improved guidance and other support materials were requested to help companies understand and meet any digital specific requirements, as well as illustrative examples that demonstrate the logic of what is being asked of preparers across a range of use and edge cases.

The FRC states that it will consider the responses and, with the other regulators involved in the Discussion Paper, take them forward as these topics are discussed further. The UK Taxonomy Suite will continue to be strategically developed to support the other regulators’ digital reporting strategies and goals. No specific decisions will be taken this year as a direct result of the Discussion Paper but the FRC remains committed to enabling digital reporting and supporting future developments and regulatory advances. The FRC also notes that the regulators have not yet committed to any timeline for possible changes within their respective remits and will take any decisions independently. Any changes may also be subject to further consultation. 

(FRC, Opportunities for future UK digital reporting – Feedback Statement, 15.05. 2025)

TNFD: Asking better questions on nature – Guide for directors

On 6 May 2025, the Taskforce on Nature-related Financial Disclosures (TNFD) published a guide designed to help board members surface the decision-useful information they need to ensure that nature-related issues are being appropriately incorporated into their company’s governance, strategy, risk management and capital allocation decision making. 

The guide states that for boards, it is key to understand the extent and severity of nature-related issues for their company. This includes where they are in the business, and how they can best be managed. To assist directors, the guide sets out 12 key questions that board directors may wish to ask company executives and consider in board meetings, and the sort of analysis they should expect to see from their organisations to support those discussions. The 12 questions have been identified based on discussions with experienced executive and non-executive board directors of leading organisations that are already considering climate- and nature-related issues. 

The guide is the first in a series to be released by the TNFD in collaboration with others over the next 12 months. 

(TNFD, Asking better questions on nature, Guide for board directors, 06.05.2025)