Call for evidence outcome

Annex: Individual reporting requirements

Updated 18 March 2024

This was published under the 2022 to 2024 Sunak Conservative government

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This publication is available at https://www.gov.uk/government/calls-for-evidence/smarter-regulation-non-financial-reporting-review-call-for-evidence/annex-individual-reporting-requirements

This annex has been produced to support the answering of the call for evidence questions. Whilst effort has been made to make it as comprehensive as possible it may not contain all requirements covered by the Companies Act 2006, supporting regulations to that Act, and all regulations that set out reporting requirements that sit outside of the Companies Act 2006.

The regulations that this annex links to are the original (as made) versions. The individual provisions that this annex links to are the latest versions (where relevant). You can switch to either the original or latest version of the regulations or provisions on the left-hand side of the legislation webpage.

For a comprehensive explanation of the requirements for the Strategic Report and Directors’ Report we would encourage you to refer to the FRC’s Guidance on the Strategic Report (June 2022).

Regulation: The Large and Medium-sized Companies and Groups (Accounts and Directors’ Report) Regulations 2008

Description: Set out the form and contents of accounts and reports under Part 15 of the Companies Act (other than those subject to the small company’s regime). The regulations replaced provisions previously contained in the Schedules to the Companies Act 1985.

Schedule 7 as made sets out the requirements for the contents of the Directors’ Report for large and medium-sized companies (in addition to the requirements set out under section 416 of the Companies Act).

Many of the provisions here have since been amended by: the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013; the Companies (Miscellaneous Reporting) Regulations 2018; the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018; and the Accounts and Reports (Amendment) (EU Exit) Regulations 2019.

Provision Location Type of company regulations/ provisions apply to
Schedule 7 of Regulation Directors’ Report Part 1 and Part 2 of Schedule 7 as made applies to medium and large companies. Part 2 applies only to public companies now.
Schedule 7 of Regulation Directors’ Report Part 3 and Part 4 of Schedule 7 applies to companies where the average number of persons employed by the company each month during the financial year exceeded 250.
Schedule 7 of Regulation Directors’ Report Part 6 of Schedule 7 applies to the Directors’ Report for a financial year if the company had securities carrying voting rights admitted to trading on a UK regulated market at the end of that year.

Regulation: The Small Companies and Groups (Accounts and Directors’ Report) Regulations 2008

Description: These regulations set out the form and contents of accounts and Directors’ Report of companies subject to the small company’s regime under Part 15 of the Companies Act.

Schedule 5 sets out the requirements for the contents of the Directors’ Report for small companies.

Provision Location Type of company regulations/ provisions apply to
Schedule 5 of Regulation Directors’ Report Small companies. Matters relating to the disclosure concerning employment etc. of disabled persons only apply where the average number of persons employed by the company in each week during the financial year exceeded 250.

Regulation: The Companies Act 2006 (Strategic Report and Director’s Report) Regulations 2013

Description: These regulations require UK companies, other than those entitled to an exemption under the small companies’ regime, to prepare a Strategic Report (section 414A-D) which includes a fair review of the business, principal risks and uncertainties facing the business and analysis using key performance indicators. If the company is not medium sized those key performance indicators must also include non-financial key performance indicators (including information relating to environmental matters and employee matters).

For quoted companies, the Strategic Report must include information relating to environmental, employee, social, community and human rights matters and disclosures about strategy, business model, trends and factors likely to affect future performance of the business (for example), and diversity. It also includes a description of the company’s strategy, business model, and gender breakdown for directors of the company, senior managers of the company and employees of the company.

Part 3 of the regulations amend section 416 of Companies Act (contents of the Directors’ Report) to remove certain disclosures and make other amendments to require quoted companies to make disclosures regarding greenhouse gas emissions.

Provision Location Type of company regulations/ provisions apply to
CA06 414A (duty to prepare)

CA06 414B (provides an exemption for small companies)

CA06 414C ((Contents), subsequently added to (also see below))

CA06 414D (approval and signing)		 Strategic Report All companies that are medium and large, where small companies are entitled to an exemption.

Companies that qualify as medium do not need to comply with 414C(4).

Quoted companies must include more detailed information covered in 414C(7) and (8).
Amendments to Schedule 7 of Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 Directors’ Report Medium and large companies as amendments apply.

For GHG emissions provision, this applies to quoted companies only.

Regulation: The Companies, Partnerships and Groups (Accounts and Non-Financial Reporting) Regulations 2016

Description: These regulations implemented the EU Non-Financial Reporting Directive (Directive 2014/95/EU) for public interest entities (PIEs) with over 500 employees. Companies in scope are required to include in the Strategic Report a non-financial information statement (section 414CA-CB) with enhanced disclosures on environmental, employee, social, human rights, and anti-corruption and anti-bribery matters.

There is some cross-over with the requirements described above in 414(C)(7) and (8) that apply to quoted companies.

These provisions were subsequently amended for certain other companies by The Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022 and The Limited Liability Partnerships (Climate-related Financial Disclosure) Regulations 2022 (see below).

Provision Location Type of company regulations/ provisions apply to
CA06 414CA (Non-financial information statement) Strategic Report Public interest entities (PIEs) with over 500 employees
CA06 414CB (Contents of a Non-Financial Information Statement)    

Regulation: The Statutory Auditors Regulations 2017

Description: These regulations require a traded LLP or banking LLP to prepare a Strategic Report by amending The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008. There is some cross-over with the requirements described above in 414(C)(7) and (8) that apply to quoted companies.

Provision Location Type of company regulations/ provisions apply to
Schedule 3 amends Sections 414A, 414C and 414D so that they apply to LLPs Strategic Report Traded or banking LLP

Regulation: The Companies (Miscellaneous Reporting) Regulations 2018

Description: These regulations require a statement on how the directors have had regard to the matters set out in section 172 of the Companies Act (such as the environment, employees, customers and suppliers) when taking decisions to promote the success of the company, also known as a section 172(1) statement (section 414CZA).

The regulations included reporting requirements to the Directors’ Report on engagement with employees, suppliers, customers, and others in a business relationship (replacing a previous provision on employee involvement), and for certain very large companies a statement of corporate governance arrangements.

The regulations also require additional information in directors’ remuneration reports, including pay ratio reporting. (It should be noted that remuneration reporting is not a focus of the Non-Financial Reporting review.)

Provision Location Type of company regulations/ provisions apply to
CA06 414CZA (Section 172 Statement) Strategic Report Large companies. Companies that qualify as medium-sized in relation to that financial year are exempt.
Amendment to Schedule 7 The Large and Medium-sized Companies and Groups (Accounts and Directors’ Report) Regulations 2008 (Engagement with employees, suppliers, customers and others) Directors’ Report A separate threshold exists for the disclosures on engagement with suppliers, customers and other business relationships, which is based on the large company size threshold.
Insertion of Part 8 of Schedule 7 Statement of corporate governance arrangements to Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 Directors’ Report Companies which satisfy the requirements of a) having more than 2000 employees and/or b) having a turnover of more than £200 million and a balance sheet total of more than £2 billion. (Unless the company is exempted because it is already required to provide a corporate governance statement, is a community interest company or a charitable company). (It should be noted that both community interest and charitable companies are outside of scope of the Non-Financial Reporting Review).

Regulation: The Companies (Director’s Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018

Description: These regulations extend and enhance the requirements to report on greenhouse gas emissions in the Directors’ Report for quoted and unquoted companies (various exemptions apply).

All organisations in scope are also required to disclose the methodology they have used, previous year’s figures, at least one intensity ratio, and any principal energy efficiency actions undertaken in the last 12 months.

Provision Location Type of company regulations/ provisions apply to
Amendments to Part 7 of Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008- mainly to expand from “emissions only” to also include “energy consumption and energy efficiency action” Directors’ Report Quoted companies consuming >40,000KwH energy are required to report on global Scope 1 and Scope 2 emissions and energy use.
Insertion of new Part 7A - Disclosures concerning greenhouse gas emissions, energy consumption and energy efficiency action by unquoted companies Directors’ Report Large unquoted companies are required to report on their energy use for UK gas, electricity, and transport activities and the associated emissions
Insertion of new Part 5A- Energy and Carbon Report (applies to LLPs Directors’ Report Large limited liability partnerships are required to provide the same information as large unquoted companies in an energy and carbon report if they do not prepare a Strategic Report.

Description: These regulations require certain companies and LLPs to provide climate-related financial disclosures within a non-financial and sustainability information statement in the Strategic Report (section 414CA-CB). The required disclosures are based on the Task Force on Climate-Related Financial Disclosures (TCFD) framework.

Provision Location Type of company regulations/ provisions apply to
Amendments of CA06 sections 414C, 414CA and 414CB (to insert “sustainability” after “non-financial”) Strategic Report PIEs and AIM-listed entities with more than 500 employees, and entities with turnover of more than £500 million and more than 500 employees.
Amendments to CA06 414CA to set out who requirements to produce a Non-Financial and Sustainability Information Statement apply to    
Amendments to CA06 414CB to specify content of Non-Financial and Sustainability Information Statement    

Non-Companies Act Requirements

Modern Slavery Act 2015

Description: Requires the publication of an annual slavery and human trafficking statement. This statement needs to be published on the commercial organisation’s website (if it has one or, if not, made available to anyone requesting it) and set out the steps it has taken to ensure there is no slavery or trafficking in its supply chains or its own business (or states that it has taken no such steps where no steps have been taken). The statement needs to be approved and signed by the Board.

Provision Location Type of company regulations/ provisions apply to
Section 54 of the Modern Slavery Act 2015 sets out the disclosure requirement. Separate regulations specify the turnover threshold Website of company or, if company has no website, copy of the statement to anyone who makes a written request. Commercial organisations that supply goods or services and that have an annual turnover of £36m or more

Regulation: The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017

Description: Require the publication of annual information to show whether there is a difference in the average pay of the male and female employees of organisations in scope.

Provision Location Type of company regulations/ provisions apply to
Section 78 of the Equality Act 2010 confers the power to require employers to disclose gender pay gap information. The 2017 regulations are the first to make use of this power. Website and submitted on the government gender pay gap service. Relevant employers who have 250 or more employees on the snapshot date of 5 April in the year to which the information required by the regulations relate.
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