The Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022

Amendment of sections 414C, 414CA and 414CB of the Companies Act 2006

3.  In section 414CA—

(a) in the heading after “Non-financial” insert “and sustainability”;

(b) before subsection (1), insert—

“(A1) A strategic report of a company to which this subsection applies must include a non-financial and sustainability information statement.”;

(c) in the introductory wording of subsection (1), for “A strategic report of a company must include a non-financial information statement if the company” substitute “Subsection (A1) applies to a company if it”;

(d) omit “or” at the end of subsection (1)(c);

(e) after subsection (1)(d), insert—

“or

(e) a company any securities of which are admitted to trading on the market known as the Alternative Investment Market.”;

(f) after subsection (1), insert—

“(1A) Subsection (A1) also applies to a company if it was a high turnover company in relation to that financial year.

(1B) Subsections (1) and (1A) are subject to subsections (3) to (7).”

(g) in subsection (2)—

(i) for “subsection (1)” substitute “subsection (A1)”; and

(ii) after “non-financial” insert “and sustainability” in both places where it occurs;

(h) after subsection (2) insert—

“(2A) A company is a “high turnover company” in relation to a financial year—

(a) where the company was not a parent company in that financial year, if in that year the company’s turnover was more than £500 million;

(b) where the company was a parent company at any time within that financial year, if in that year a group headed by the company had an aggregate turnover of more than £500 million net.

(2B) For a period that is a company’s financial year but not in fact a year the figures for turnover given by subsection (2A) must be proportionately adjusted.

(2C) For the purposes of subsection (2A)(b)—

(a) aggregate turnover is ascertained by aggregating the relevant figures determined for each member of the group;

(b) “net”, in relation to aggregate turnover, is to be interpreted in accordance with section 383(6).

(2D) Section 383(7) applies for the purposes of subsection (2A)(b) of this section as it applies for the purposes of section 383.”;

(i) in subsection (3), for “Subsection (1) does not apply if” substitute “Subsection (A1) does not apply to a company if”;

(j) in subsection (4)—

(i) for the words from the beginning to “company in that financial year,” substitute—

“(4) Subsection (A1) does not apply—

(a) to a company which was not a parent company in that financial year, if”; and

(ii) in paragraph (b), for the words “where the company was a parent company at any time within that financial year,” substitute “to a company which was a parent company at any time within that financial year, if”;

(k) in subsection (7), for “Subsection (1) does not apply if” substitute “Subsection (A1) does not apply to a company if”;

(l) in subsection (8)(c), after “non-financial” insert “and sustainability”;

(m) in subsection (10)—

(i) for “(1)” substitute “(A1)”; and

(ii) after “non-financial” insert “and sustainability” in both places where it occurs.