business man using magnifying glass to inspect documents

Leading public companies have stepped up their voluntary disclosure of climate-related risks, but U.K. regulators says more needs to be done.

Reviews by the U.K. Financial Conduct Authority (FCA) and the U.K. Financial Reporting Council (FRC) found that issuers have made “significant steps” to improve the quality of climate-related information in their financial reports and adherence to the recommendations from the Task Force on Climate-related Financial Disclosures (TCFD).

The FCA — which reviewed 171 companies at a high level and 31 companies in detail — said it found a significant improvement in issuers’ climate disclosure. But it also found instances where issuers claimed consistency with the TCFD’s recommendations where the actual disclosure was very limited.

The regulator said it’s considering these cases and may take further action.

The FRC also reviewed 25 companies with larger climate exposure. It found that they provided climate-related reporting in their financial statements and adhered to many of the TCFD recommendations. However, it also found room for improvement.

Specifically, it said companies need to: provide more detailed information about the effect of climate change on different sectors and geographies; balance the discussion of climate-related risks and opportunities; link climate-related disclosures to other risk management and governance processes; and explain more clearly how different global warming scenarios and their own net zero pledges will affect the valuation of their assets and liabilities.

“We are pleased to see improvements in the completeness and consistency of disclosures with the TCFD framework, but there is clearly more to do,” said Sacha Sadan, director of ESG at the FCA, in a release.