A FTSE SMALL CAP Group Counsel & Company Secretary writes...
Question: Are listed companies changing the Terms of Reference of their Audit Committee specifically to make reference to TCFD disclosures (and similar ESG-related disclosures and information)?
Background: My company has a generic ToR for its Audit Committee which reflects the requirements of the UK Corporate Governance Code 2018 and therefore we do not spell out specifically the disclosures the Committee needs to consider. The Committee Chair has asked if we should …
We have also changed our TORs to make reference to ESG matters but don’t specifically mention TCFD.
I would say TCFD is covered under the general reporting duties of the committee (financial and non-financial). More so if the committee also acts as a risk committee. I made a change last year precisely to align with ESG matters in general but didn’t mention TCFD specifically. I guess there’s no harm in referring to TCFD but you run the risk of having to amend the ToR every time there’s a new disclosure requirement. I’m waiting for BEIS to publish the outcome of the consultation to do a full review of the ToR.