The disclosure of climate-related risks and opportunities in financial statements: the UK’s FTSE 100

Zahra Borghei, Martina Linnenluecke, Binh Bui

Research output: Contribution to journalArticlepeer-review


Purpose: This paper aims to explore current trends in how companies disclose climate-related risks and opportunities in their financial statements. As part of the authors’ analysis, they examine: whether forward-looking assumptions and judgements are typically considered in reporting climate-related risks/opportunities; whether there are differences in the reporting practices of firms in carbon-intensive industries versus non-carbon-intensive industries; and whether negative media reports have an influence on the levels of disclosure a firm makes.

Design/methodology/approach: The authors chose content analysis as their methodology and examined the financial statements published by firms listed on the UK’s FTSE 100 between 2016 and 2020. This analysis is framed by Suchman’s three dimensions of legitimacy, being pragmatic, cognitive and moral.

Findings: Climate-related disclosures in the notes and financial accounts of these firms did increase over the period. Yet, overall, the level the disclosures was inadequate and the quality was inconsistent. From this, the authors conclude that pragmatic legitimacy is not a particularly strong driving factor in compelling organisations to disclose climate-related information. The firms in carbon-intensive industries do provide greater levels of disclosure, including both qualitative and quantitative (monetary) content, which is consistent with cognitive legitimacy. However, from a moral legitimacy perspective, this study finds that firms did not adapt responsively to negative media coverage as a way of reflecting their accountability to broader public norms and values. Overall, this analysis suggests that regulatory enforcement and a systematic reporting framework with adequate guidance is going to be critical to developing transparent climate-related reporting in future.

Originality/value: This paper contributes to existing studies on climate-related disclosures, which have mainly examined the ‘front-half’ of annual reports. Conversely, this study aims to shed light on these practices in the “back-half” of these reports, exploring the underlying reasons for reporting climate-related risks and opportunities in financial accounts. The authors’ insights into the current disclosure practices make a theoretical contribution to the literature. Practitioners can also draw on these insights to improve how they report on climate-related risks and opportunities in their financial statements.
Original languageEnglish
Number of pages33
JournalMeditari Accountancy Research
Publication statusE-pub ahead of print - 19 Dec 2023


  • Climate change
  • Climate-related risks and opportunities
  • Content analysis
  • Disclosure
  • Financial statements


Dive into the research topics of 'The disclosure of climate-related risks and opportunities in financial statements: the UK’s FTSE 100'. Together they form a unique fingerprint.

Cite this