The corporate reporting landscape in the UK continues to develop rapidly as demand grows for relevant and transparent information that meets the requirements of today’s users of annual reports. Stakeholders seek to understand how companies are pivoting to meet the challenging social, economic and political changes of the day, and how they plan to remain resilient in the face of uncertainty. Stakeholders expect businesses to play a crucial role in driving sustainable economic and social development by responding to existential challenges, including climate change, regulatory scrutiny and developments in technology, including artificial intelligence. Annual reports are a critical component in this ongoing dialogue between business and wider society. Our Corporate Reporting Insights focus on timely, short and topical observations designed to help you navigate new disclosure requirements, emerging practices and growing expectations for greater transparency and accountability.Explore our reports to discover these trends in corporate reporting.
Explore our 2026 insights
First time reporting under the 2024 Code
Insights and observations
Transparent reporting is essential for building stakeholder trust in a company's governance practices. The changes introduced by the 2024 UK Corporate Governance Code (“the Code”) aim to demonstrate the impact of governance arrangements. By producing meaningful and context-specific governance reports, companies can enhance understanding of the board's role and strategic direction, which in turn can help attract capital and pursue business opportunities.Read the full report
Key takeaways
There was evidence that companies have responded to a key objective of the government’s corporate governance and audit reform agenda to enhance the board’s focus on risk and control – with some providing greater clarity on the activities undertaken by the board to monitor and perform an annual review of the effectiveness of the risk management and internal control framework
The length and relevance of corporate governance disclosures varied and there are opportunities to streamline reporting by focusing on outcomes of governance arrangements rather than using boilerplate language and repeating wording from the Code
Some boards demonstrated how they use monitoring and assessment activities to confirm that the desired culture is embedded throughout the organisation and reflective of the stakeholder experience
Most companies have included disclosure covering the topics in the Audit Committees and the External Audit: Minimum Standard (“Minimum Standard”) in their audit committee reports, yet less than half clearly referenced the Minimum Standard and described specific activities undertaken to meet it
Although most companies described their malus and clawback provisions, some had not provided an explanation as to why the selected period is best suited for the organisation or whether the provisions were used in the last reporting period
Actions for boards to take
Take the opportunity to challenge disclosures that do not provide company and year specific descriptions of the board’s key activities and decisions taken
Ensure all parts of the annual report tell “one story” by aligning key board decisions and actions with the messaging in the strategic report
With the increasing focus on employee rights, corporate culture and behaviours, set the tone from the top to demonstrate clear alignment of culture, purpose, values and strategy
Looking ahead to the 2026/2027 annual report: ensure arrangements are being put in place to provide the board with appropriate assurance to support the new material controls declaration; review the outputs of dry run activities; review a draft of the declaration; and discuss the proposed approach with the external auditors
Reporting on risks, opportunities and uncertainties in our dynamic world
In an era marked by geopolitical volatility and rapid technological advancement, it is critically important for annual reports to provide a clear, consistent narrative around risks, opportunities and uncertainties. Energy security, geoeconomic confrontation leading to barriers to global trade, armed conflict affecting supply chains, extreme weather events, involuntary migration and societal polarisation are all vying for attention from business leaders seeking to chart a path to sustainable success – and all of this alongside high velocity innovation, including AI and Agentic AI. These risks, opportunities and uncertainties must be at the forefront of the board’s strategy, informing its decision-making and the exercise of its fiduciary duty.Our survey of the most recent annual reports of 75 FTSE 100 companies examines how they have identified, assessed and reflected these risks, opportunities and uncertainties in their reporting.Read the full report
Key takeaways
97% of FTSE 100 companies acknowledge geopolitical matters as risks in their annual reports, but only 16% articulate related opportunities
Tariffs and supply chain resilience dominate disclosures around geopolitical matters: 85% mention tariffs whilst 79% highlight supply chain challenges
96% of companies mention AI, with 80% discussing board-level governance and 28% mentioning Agentic AI
89% of boards discussed climate, yet only 41% of companies disclosed board oversight of sustainability assurance
Actions to take
Ensure that risks, opportunities, and uncertainties are consistently and transparently integrated from the Chair and CEO statements through the strategic report into the financial statements
Explain clearly how the board and its committees remain informed, oversee and take decisions on immediate geopolitical matters and longer-term structural issues such as sustainability and AI, highlighting the processes that contribute to strong governance
Explain governance and oversight over strategic and capital allocation trade-offs
Consider forward-looking disclosures regarding the impact of advancements in technology and Agentic AI, their impact on the business model and the workforce, and related security considerations, since this will be critical to the ongoing resilience of many organisations
Corporate Reporting Insights 2026First time reporting under the 2024 CodeInsights and observations
The background to our surveyThis year marks the first time companies are reporting under the 2024 UK Corporate Governance Code (‘the 2024 Code’), which aims to enhance board accountability and reporting transparency, reinforcing the value of a strong corporate culture and robust risk management to the long-term success of the business.With the objective of helping companies identify opportunities to deliver more transparent and outcomes-focused disclosures, we have looked at how 50 FTSE 350 December year-end companies have approached specific areas of the new Code and we identify common challenges and better practice examples.Reporting on outcomesWith the introduction of a new Principle C - “Governance reporting should focus on board decisions and their outcomes in the context of the company’s strategy and objectives”, the 2024 Code places greater emphasis on the outcomes of governance arrangements. We observed varying approaches to the reporting of outcomes, with 62% providing company and period-specific case-studies demonstrating actions that stem directly from board engagement or consideration. Better practice examples highlighted how insights gathered from staff engagement initiatives have influenced the board's decisions, for example one company explained a decision made in relation to pension contributions. Another company described a new culture framework introduced during the year.Another example reported on the impact of the previous year’s board performance evaluation where a recommendation was to bring greater focus and insights on technology matters into the boardroom. In response, the board reported on a decision related to oversight of technology transformation which aligned well with insights in the strategic report on the implementation of a new digital transformation and innovation imperative, demonstrating one integrated story.We also looked at how companies reported on outcomes in relation to the Section 172 Statement. Better practice examples were shaped around board-level engagement, actions and oversight of management activities, reinforcing what was presented to the board as feedback from stakeholder engagement and how the board responded to that feedback. Examples of clear outcomes included board decisions on acquisitions and capital allocation following engagement with various stakeholders.Example disclosures which include the elements described above: Barclays plc (page 125), Lloyds Banking Group plc (page 76), RHI Magnesita N.V. (pages 21-27, 192-194), Anglo American plc (pages 192-195, 197), Ocado Group plc (page 118, 125-132), SEGRO plc (pages 90-91), Coca-Cola HBC (pages 212-213), Pearson plc (page 82)Embedding cultureThe introduction of the new Employment Rights Act and increasing responsibilities of directors provides a timely reminder that a workplace culture based on transparency, trust, respect and inclusivity strengthens organisational resilience and performance in the long-term. When culture, purpose, values and strategy align, there is a clear framework to guide decision-making and everyday action throughout the organisation. Provision 2 of the 2024 Code expands the board’s role in culture, requiring boards to “assess and monitor culture and how the desired culture has been embedded”. Companies are now expected to explain the board’s activities and any actions taken to embed culture, moving beyond statements of intent to providing evidence of impact.A few companies in our sample included a separate section which included a clear reference to “embedding” culture in the title and described the board’s activities and indicators used to gauge corporate culture such as data on employee turnover and any health and safety or whistleblowing incidents. Better practice disclosures also described the feedback from employees’ surveys and what actions or decisions had been taken by the board to address that feedback. Some companies have developed dashboards that track insights related to performance and customer satisfaction which are reviewed by boards. A few companies also highlighted the importance of the board shaping and embedding the company’s values in the chair’s introductory letter – these companies explained how directors engage with employees and other stakeholders to assess the company’s culture through monitoring progress against diversity and inclusion targets and through site-visits, which enable on-the ground assessment of culture and values and act as a pulse check of how effectively values are embedded. More meaningful and insightful culture reporting highlighted specific board-level decisions and initiatives from the year that advanced or reflected cultural objectives.Example disclosures which include the elements described above: British American Tobacco plc (pages 186-187), International Airlines Group (pages 101-102), Lloyds Banking Group plc (page 79), Mondi plc (page 72), SEGRO plc (page 79), Bunzl plc (page 80), The Weir Group plc (pages 98-99)Role of the Senior Independent Director (SID)The role of the SID is increasingly under scrutiny, with stakeholders seeking greater transparency on the SID’s activities and influence. In its 2025 review of corporate governance reporting, the FRC encouraged companies to provide company specific and time relevant information on the role of the SID and to explain the activities of the SID during the year. The SID’s role can become increasingly important when the board or company is undergoing challenge.Whilst two-thirds of our sample repeated the wording from the Code when describing the role of the Senior Independent Director, 25% provided more specific disclosures reflecting the company’s circumstances and expectations of the SID’s role. Some reporters used QR-codes or links to their website where a fuller description of the responsibilities of their SID was explained. Some provided details of the SID’s activities in a format of Q&A or a personal letter from the SID in their annual report.Example disclosures which include the elements described above: British American Tobacco plc (page 202), Primary Health Properties plc (page 66), Lloyds Banking Group plc (page 73), The Weir Group plc (page 93)Risk management & internal controlThis area is in the spotlight due to the introduction of Provision 29 in the 2024 Code (effective next year) and revised Principle O, which now requires companies to “establish and maintain” an effective risk management and internal control framework. Just under half of our sample confirmed that the board had “maintained” oversight of the risk management and internal control framework. The FRC Guidance explains in paragraph 260 that “monitoring and review of risk management and internal controls are intended to allow the board to conclude whether the framework is properly aligned with strategic objectives; and satisfy itself that the framework addresses the company’s risks and is being developed, applied and maintained appropriately. Monitoring and review aim to identify and evaluate areas for improvement in the design, implementation and operation of the framework.”The FRC’s 2025 Review of corporate governance reporting called on boards to provide a clearer distinction between the activities undertaken to monitor the ongoing effectiveness of the risk management and internal control framework and the activities undertaken to carry out the annual review of effectiveness. 16% of companies in our sample clearly distinguished the monitoring and reviewing responsibilities in their reporting. Those who did clearly articulated the board’s activities during the year to monitor the framework, including who had conducted the review, what was done specifying the scope and frequency for reporting from units or individuals within the company, subsidiaries and other relevant parties (e.g., external service providers), and when and how conclusions were reached. There was then a separate description of the outcome of board’s review of the effectiveness of the risk management and internal control framework.50% of companies in our sample provided a positive conclusion or confirmation on the effectiveness of the risk management and internal control framework. A further 20% of our sample chose just to confirm that their systems were in line with the FRC Guidance without providing any indication of the overall effectiveness of the framework. The remaining 30% either did not provide any conclusion or provided a negative conclusion, confirming that no weaknesses have been identified.Example disclosures which include the elements described above: Pearson plc (page 109), Centrica plc (page 73), Haleon plc (page 72), Bunzl plc (pages 90-91, 102)Preparing for the Provision 29 declarationWith the first reporting period for the new Provision 29 rapidly approaching, companies were also expected to provide updates on their progress towards implementing the new material controls declaration. Almost all (2024: 64%) companies referenced activities they had undertaken to prepare with the following matters mentioned in those disclosures, please see the graph on the right.Better practice examples provided valuable insights on how material controls were defined and how existing sources of assurance were being mapped to support the future board declaration.Example disclosures which include the elements described above: Rio Tinto plc (page 119), Anglo American plc (page 217), Breedon Group (page 59), Bunzl plc (page 103)Matters referenced in preparation for Provision 29Reporting on the Minimum StandardThe FRC’s Minimum Standard was originally published in 2023 and aimed at FTSE 350 companies on a voluntary basis. However, the 2024 Code incorporated the Minimum Standard within Provision 25, so all companies following the 2024 Code are required to follow the Minimum Standard. This is further reinforced by Provision 26, which asks for a description of the work undertaken by the audit committee to cover the matters set out in the Minimum Standard. 40% of companies in our survey clearly referenced the Minimum Standard in the audit committee report either with a header which specifically refers to the Minimum Standard or under the heading of “External audit”. In March 2026, the FRC published updated guidance on “Improving the quality of ‘comply or explain’ reporting” which reiterates that the annual report should clearly disclose which matters of the Minimum Standard have been followed, and which have not. We looked at how each of the matters covered by the Minimum Standard had been addressed by companies:
the significant issues that the audit committee considered relating to the financial statements, and how these issues were addressed
More meaningful reporting of this matter included a brief summary of the nature and context of the significant issue explaining to the reader why the issue was deemed to be important in that particular reporting year; actions taken by the audit committee in respect of each significant issue, conclusions reached and the nature of discussions held with auditors on those issues.
an explanation of the application of the entity’s accounting policies
This would be expected to focus on year-specific and entity-specific matters, including accounting policy choices that have been the subject of focus by the audit committee. Better practice reporters either specifically confirmed that there were no changes in accounting policies in the year or explained activities undertaken by the audit committee to satisfy themselves with management’s proposed treatment.
where shareholders have requested that certain matters be covered in an audit and that request has been rejected, an explanation of the reasons why – no instances were identified in our sample
an explanation of how it has assessed the independence and effectiveness of the external audit process and the approach taken to the appointment or reappointment of the external auditor, information on the length of tenure of the current audit firm, when a tender was last conducted and advance notice of retendering plans
Those who reported better on this matter split audit committee activities into three categories: 1. an assessment of independence; 2. effectiveness of external audit and 3. retendering plans. While all these matters are interlinked topics and grouping them can be helpful in the context of concise reporting, disclosures appeared to be more company- and year-specific when independence was reported as a separate element of an effective external audit process. Better reporting on independence described the audit committee’s criteria such as review of the changes in key external audit staff and outlining how the audit committee has obtained its assurance. Better disclosures on effectiveness focused more on assessing the quality, challenge and output of the audit process.
where a regulatory inspection of the quality of the company’s audit has taken place, information about the findings of that review, together with any remedial action the auditor is taking in the light of these findings
Of those companies that reported on a regulatory inspection taking place during the year, some also explained the outcomes of those reviews and stated the audit committee’s activities overseeing this process.
in the case of a board not accepting the audit committee’s recommendation on the external auditor appointment, reappointment or removal, a statement from the audit committee explaining its recommendation and that of the board, and the reasons why the Board has taken its different position (this should also be supplied in any papers recommending appointment or reappointment) – no instances were identified in our sample
an explanation of how auditor independence and objectivity are safeguarded, if the external auditor provides non-audit services
All companies mentioned the existence of policies for approval of Non-Audit Fees. Some provided insightful details on thresholds for the audit committee’s approval including the value or nature of services considered, demonstrating that clear processes were in place.
if a tender process has taken place within the year, the audit committee should explain the criteria used to make the selection and the process followed
Some companies clearly disclosed these additional elements imposed by the Minimum Standard. Those who reported on criteria cited the assessment of the participating firms’ independence, audit quality and approach, the level of independent challenge expected and demonstrated, knowledge and experience of the sector, technical expertise and use of emerging technologies, value-added insights, as well as cost-effectiveness of the process. Better practice reporters described their selection process in a form of a timeline explaining leadership of the process and materials considered as part of the selection. Clear and comprehensive disclosures on audit tendering can enhance stakeholders’ understanding of audit committee oversight and help demonstrate the company’s commitment to audit quality and independence.
the audit committee should report on the activities it has undertaken to meet the requirements of the Standard
Although some reporters omitted a specific reference to the Minimum Standard, which is a 2024 Code requirement, often the relevant matters had still been provided within the audit committee report, reflecting that the Minimum Standard has brought together a number of existing pieces of guidance rather than introduced new requirements.
Example disclosures which include the elements described above: The Weir Group plc (page 115), Howden Joinery Group plc (pages 129-131), SEGRO plc (page 104), Mondi plc (page 94), GSK (pages 134-135, 138), Endeavour Mining plc (page 85)Reporting on malus & clawbackThe 2024 Code introduced revised provisions on remuneration with particular attention on malus and clawback arrangements. Provision 38 now asks companies to describe malus and clawback provisions in their annual reports, covering the following elements:
the circumstances in which they could be used
the period for malus and clawback and the rationale for the chosen period
whether the provisions were used in the last reporting period, with an explanation if so.
It is important to note that where companies do not have either malus or clawback provisions, that should be reported as a non-compliance with Code Provision 37.In our sample, most companies disclosed the circumstances in which malus and clawback provisions could be used, and although almost all companies disclosed the period that these provisions can apply to awards, some of those companies had not provided an explanation as to why the selected period is best suited for the organisation. From those who did, most cited alignment with vesting periods and post-vesting holding periods as those periods are considered to allow an appropriate amount of time for any of the above circumstances to become known. 18% of our sample failed to state whether the provisions had been used in the last reporting period.Example disclosures which include the elements described above: Barclays plc (page 174), International Airlines Group (page 133), L&G (page 92), The Weir Group plc (page 136)Malus and clawback disclosuresStreamlining corporate governance reportingOne of the key messages from the FRC’s Review of corporate governance reporting was a call for companies to consider ways of reporting more concisely, cutting down on boilerplate regulatory language in governance reports and describing more company-specific information making annual reports more engaging for readers. Companies were encouraged to reassess the volume and relevance of their disclosures and focus on material strategic and governance considerations. The FRC’s suggested ways to streamline corporate governance reporting can be summarised as follows:
focusing on board actions and outcomes: Anchor disclosures in board-level decisions
avoiding narrative without purpose: Only include information that is necessary and useful
eliminating boilerplate language: Avoid generic statements that add little value
avoiding duplication: Consolidate related content and use cross-referencing
minimising regulatory repetition: Demonstrate practical application rather than repeating Code language.
We observed the following examples of reporters who had attempted to streamline their governance reports:
one company presented board composition disclosure in a single diagram taking half a page, combining role of directors (executive/non-executive), nationality, gender balance, ethnicity balance and length of tenure. These disclosures are usually set out separately across multiple pages
another company reduced disclosures in the risk management section by making the risk description more year-specific and highlighting mitigating actions in form of a bullet points list. In addition, emerging risks were presented in a table with insights on risk drivers and key mitigating actions. Reporting in this way allowed the company to move away from static risk descriptions to provide more current and specific insights on the nature of the risks the company is facing and how those are being managed in the current environment.
The FRC has encouraged companies to continue looking for opportunities to streamline their reporting to make it impactful and transparent.Example disclosures which include the elements described above:Lloyds Banking Group plc (pages 24-29), Endeavour Mining plcTo concludeAs emphasised by the FRC, the UK Corporate Governance Code aims to equip boards with Principles that must be applied but it also provides flexibility to companies in complying with the Provisions to allow them to build up governance arrangements that work for each company individually. In embracing that flexibility, companies need to challenge themselves to report more transparently by demonstrating what impact their chosen governance arrangements have had on the company’s strategy, performance and resilience.In addition, as we get closer to reporting on the new Provision 29, we wanted to remind companies about our guidance to help navigate this new requirement more effectively: ‘Risk, controls and assurance: a framework for the new material controls declaration’.
Take the opportunity to challenge disclosures that do not provide company and year specific descriptions of the board’s key activities and decisions taken
Ensure all parts of the annual report tell “one story” by aligning key board decisions and actions with the messaging in the strategic report
With the increasing focus on employee rights, corporate culture and behaviours, set the tone from the top to demonstrate clear alignment of culture, purpose, values and strategy
Looking ahead to the 2026/2027 annual report: ensure arrangements are being put in place to provide the board with appropriate assurance to support the new material controls declaration; review the outputs of dry run activities; review a draft of the declaration; and discuss the proposed approach with the external auditors
Corporate Reporting Insights 2026Reporting on risks, opportunities and uncertainties in our dynamic world
The background to our surveyThe annual report should provide a clear understanding of a company's position, performance, business model and strategy, along with the risks, opportunities and uncertainties they face. It should provide shareholders with relevant information that is useful for making resource allocation decisions. The annual report is also vital in enabling shareholders to assess the governance and stewardship of the business, including the approach the directors take to the risk management and internal control systems that identify, manage and mitigate risk.Today's dynamic world offers a new set of challenges around economic and geopolitical volatility and the multitude of risks and uncertainties, with accompanying opportunities for companies that are able to take advantage of them. The World Economic Forum's Global Risks Report 2026, based on the views of over 1,300 leaders and experts globally, illustrates how fast-moving the risk landscape has been. Although the ten-year horizon is still dominated by sustainability risks, which remain core strategic concerns, over the two-year horizon companies need to navigate a changing set of risks, with the top five risks including geoeconomic confrontation, misinformation and disinformation, societal polarisation, extreme weather events and state-based armed conflict. It is notable that since the 2025 Global Risks Report, all of these risks have moved in terms of priority - and the Global Risks Report 2026 was published in January, some months prior to the Iran war and the blockade of the Strait of Hormuz affecting supply chains and oil prices.Alongside these weighty global challenges sit the risks, opportunities and uncertainties offered by technological change, particularly AI and Agentic AI, linking into the misinformation and disinformation risk cited by the WEF report and also the longer-term concerns over the adverse outcomes of AI technologies. Companies are starting to balance how they think about employment and recruitment in the age of AI, both in terms of numbers and new skillsets. So there is a lot for directors to evaluate, balance and trade-off to reach the right, sustainable outcomes for their business - and to explain those decisions and trade-offs to the shareholders in the annual report.Our survey of the most recent annual reports of 75 FTSE 100 companies examines how their reporting has identified, assessed and addressed the risks, opportunities and uncertainties arising from this dynamic environment. We consider how companies have explained their approach, the narrative around material risks, opportunities and uncertainties, and whether this has flowed through their annual report as a whole to present a holistic and coherent story of sustainability, resilience and governance.Reporting on geopolitical matters and current eventsWe have used a broad definition of geopolitical matters in this survey, covering many of the global risks outlined by the WEF report as well as some more specific areas of current concern that reflect a combination of those risks. Our definition includes geoeconomic confrontation (including sanctions and tariffs), state-based armed conflict and other inter-jurisdictional matters, but also the associated social and economic fallout, incorporating therefore supply chain disruptions, energy security and cybersecurity.Almost all companies acknowledged geopolitical matters in their annual report (99%).Although some references were high-level recognition of current events, narratives demonstrated detailed consideration of the impact of specific geopolitical drivers including Russia-Ukraine and the Middle East conflicts, US-China tensions and trade protectionism.Chair and CEO statementsCompanies mentioned geopolitical matters throughout the annual report, although this was less frequent in the CEO’s statement than elsewhere in the annual report.Disclosure in the CEO’s statement was low, which reflected a general trend to focus in on the fundamentals of the performance and strategic priorities and actions. Where the CEO did discuss geopolitical matters, this generally reflected targeted challenges or opportunities to the business, such as tariffs, and identified particular trends and industry-specific concerns.In the Chair’s statement, most mentions of geopolitical matters were as part of a high-level commentary on the prevailing business environment and with a few that were business or industry specific. Some Chairs explained how the governance of the business ensures the expertise to navigate an uncertain environment and contributes to ongoing stability.In several cases we noted that a consistent story throughout the report started with the Chair’s statement framing the landscape and carried that through to the principal risks and the board’s key decisions. For example, an energy company introduced geopolitical themes and analysis in the Chair’s statement, the same considerations were illustrated in the s172(1) statement’s description of key decisions during the year and the strategic rationale was provided in the strategy and governance sections. Another example involved a defence company where the Chair discussed the effect of the geopolitical landscape on the sector, carried through to opportunities, risks and capital allocation decisions disclosed throughout the strategic and governance reporting.Example disclosures include BAE Systems plc (p2, p9), Diageo plc (p2, p4) and Informa plc (p8)Risks, opportunities and governanceThe graph shows that, overwhelmingly, annual reports disclosed geopolitical matters in the context of risk management. Many companies included this as part of the principal risks and uncertainties (63 companies, 84%) and incorporated geopolitical matters on average into two of their principal risks.More than half of our sample identified geopolitical matters as impacting emerging risks (43 companies, 57%). Seven of these companies had not included geopolitical matters in the principal risks they disclosed, indicating that this is still an evolving area. Further evidence of this evolution of how companies assess and disclose geopolitical risk came from one company in our sample that indicated that they expect to promote “geopolitical and regulatory environment” to a stand-alone principal risk category from 2026.A minority of companies also identified geopolitical matters as opportunities for their business. Not all were explicit about the opportunities they identified. Of those that gave a clearer steer, six companies reported themselves as being well-positioned to respond and a further six reported that they planned to capture new opportunities through expanding their customer base, product offering or geographical reach.A majority of companies in our sample drew out the impact of geopolitical matters in their corporate governance statements or in an audit or risk committee report. Many of these disclosures included the board or committee’s consideration of risk assessment and how the board stays informed on geopolitical matters; some mentioned the expertise of board members or the increased risk associated with cyber security - particularly with respect to the involvement of nation states in cyber attacks. A handful of corporate governance statements included case studies on the board’s oversight of geopolitical matters.Example disclosures include Anglo American plc (p199), NatWest Group plc (p130)Trade-offsOf course, none of the matters we explore in this survey stand in isolation, and just under half of the 75 FTSE 100 companies explicitly drew out in the annual report some of the trade-off decisions between competing priorities, for instance between energy security and the pace of approaching net zero emissions, between an AI-led streamlined model and a multi-brand human-led model of the business, between a global manufacturing footprint and local production. Others illustrated trade-offs implicitly through capital allocation disclosures.Where in the annual report do companies mention geopolitical matters?The breadth of geopolitical matters addressedOne of the areas of particular interest in our sample of FTSE 100 annual reports was the sheer breadth of the geopolitical matters that were identified by companies as risks, opportunities or uncertainties. There were some areas that were commonly mentioned - the risks associated with tariffs and supply chain for instance - and a fairly long tail of less frequently discussed matters. The clearest disclosures on each topic did not simply identify the risk, they explained its materiality to the specific business, and they connected it to a decision or a mitigation. TariffsTariffs were a dominant theme for many companies, reflecting the escalation in US trade policy activity during the reporting year. The prevalence of mentions reflects the international reach of the FTSE 100 companies we surveyed. Whilst some observations were relatively high level, companies that considered they could be affected more substantially by tariff activity disclosed:
emphasis in principal risks and uncertainties - overall comments in the risk management section, in emerging risks, in the broadened scope of principal risks or in one case a new principal risk centred around governmental policies.
viability statement scenarios - tariffs included both in broad combined risk scenarios and specific scenarios such as a full trade war leading to a global stagflation shock.
governance interventions - briefings to the board or committees, planning activities at sub-committees.
financial statements impact - disclosure that tariffs had an impact on estimates such as impairment.
Several companies captured the velocity with which tariff announcements affected their business and called out the specific policy and even the global impact. Some went further to explain how the effect on the business in 2025 illustrates the sensitivity of the market to future shocks and how they might navigate these in the future.Example disclosures include Antofagasta (p13), Anglo American plc (p148, p292), Smith & Nephew plc (p11), M&G plc (p49)Supply chain challenges and resilienceSupply chain challenges and / or resilience was referred to broadly across our FTSE 100 sample and across almost all industries. In most cases this was a high-level mention of a topic that affected the overall risk environment.Companies in industries most exposed to supply chain disruption - in particular those that relied on critical minerals - included this as a principal risk, with some identifying the potential for volatility but with the risk generally being kept at the same level as the previous year. A handful of companies mentioned that supply chain constraints had eased during the year.The majority of companies focused mainly on the resilience of their supply chains, the actions taken to ensure continued resilience and some also considered the supply chains of their investee companies or their customers. Disclosures focused on disruption being a “new normal” and the increasingly agile responses of governments and suppliers, with commentary on supplier companies increasing warehouse space requirements, frontloading imports and re-routing trade flows.Management and mitigation techniques mentioned in disclosures included regular scenario testing, real-time hazard analytics, identification of dual-source suppliers or alternative products, upskilling procurement teams and creating specific teams or roles to oversee supply chain activities. One company talked about embedding its own employees within key suppliers’ organisations.Example disclosures include Spirax Group plc (p10, p80, p130), Rolls-Royce Holdings Plc (p13, p20), Melrose Industries Plc (p36)Cyber securityOf the 40% of our sample that mentioned cyber security as a geopolitical matter, the majority again included this as a high-level mention of a topic associated with the geopolitical landscape or simply as the risk of state-sponsored cyberattacks. A handful specifically mentioned cyber warfare as a risk, associating this with current conflicts. Other disclosures included:
assessment of the cyber resilience of the supply chain or mention of the supply chain being targeted
cyber security deep-dives at board or risk committee level
preparation for future geopolitically-motivated cyber disruption.
Example disclosures include GSK plc (p67), The Weir Group Plc (p67)Energy securityIn addition to the 31% of companies that mentioned energy security as a geopolitical matter, some companies also linked sustainability - particularly the risk of extreme weather events - with supply chain resilience and raised that the combination of geopolitical tension and climate events could cause even more significant challenges.We identified some sector differences in whether energy security was treated primarily as a cost or a regulatory risk (manufacturing, travel) or as a strategic opportunity (mining, investment management).A handful of companies linked energy security explicitly with energy efficiency, with one company disclosing a board deep-dive on the topic and another company citing having two directors on the board with expertise in climate and energy efficiency.Example disclosures include NatWest Group plc (p36), Imperial Brands PLC (p55)In what context does the annual report mention geopolitical matters?Impact on the financial statementsThe narrative about geopolitical matters, tariffs and energy security in most cases did not make its way into the financial statements. Across the financial statement sections, references even to the word “geopolitical” are limited, with on average less than five mentions, even in companies where geopolitical risk is discussed extensively in the front half.This is not necessarily wrong: the financial statements are a more formally structured and more backward-looking part of the annual report. However, it does raise the question of whether companies are doing enough to translate the external environment narrative into specific accounting judgements, assumptions and sensitivities that investors can understand and analyse. Insight into linkages, consistency of information and assumptions, providing necessary explanations and cross-references of information can help demonstrate the linkage and support coherence.For most of our sample, while there was no obvious linkage of the geopolitical narrative to the financial statements, there was also nothing to suggest that they were in any way inconsistent. One company demonstrated clear connectivity by explaining the impact of tariffs in the strategic report, in the significant issues affecting financial statements in the audit committee report and in the goodwill impairment disclosures in the financial statements.Board leadership for growth and resilienceLooking forward to the risks that dominate the top of the ten-year horizon in the World Economic Forum’s Global Risks Report 2026, the top three are sustainability focused: extreme weather events, biodiversity loss and ecosystem collapse, and critical changes to the Earth’s systems. Putting aside the disclosure demands posed by different jurisdictions, largely focused on climate reporting, the fundamentals are whether there is strong and resilient governance that will enable a business to position itself to weather, or even benefit from, these structural and systemic changes. This was highlighted in the recent publication of the World Economic Forum’s white paper Board Leadership for Growth and Resilience: Guiding Principles for Climate and Nature Governance.Using the supplementary Board Reflection and Management Oversight Questions, designed to assist boards and directors in assessing the quality of their governance and areas to implement change, we evaluated what the 75 FTSE 100 companies in our sample had disclosed around their board’s governance over sustainability matters. The analysis we set out below illustrates the WEF's Guiding Principles and how those are applied in these annual reports.Principle 1: Oversight and responsibility - The board is accountable for promoting long-term resilience and value creation. It oversees systems and processes that formalise responsibility for the impact of changes to climate and natural resources on organisations.Principle 3: Risk and opportunity - The board oversees material risks, opportunities and dependencies to protect and enhance stakeholder value. It considers how climate and nature both shape and are shaped by the organisation’s activities and financial performance.A substantial majority of companies in our sample held regular board discussions on climate, with 64% covering both risks and opportunities in those discussions. 81% disclosed clear board mechanisms for keeping up to date on climate matters and 65% included some evidence of how these mechanisms informed board decision making.Governance mechanisms described in the report included:
board oversight via sustainability or ESG committees
strategic oversight committees, incorporating climate and transition plans into overall strategy considerations
regular education, updates or deep-dives on climate principal risks
periodic reporting to the board on a set of climate metrics, KPIs or scorecards
specific board-level approvals on topics such as climate strategies, scenarios, disclosures and action plans.
A handful of companies incorporated nature-related risks and opportunities into their principal risks, with disclosures covering the following areas:
several companies integrated nature pillars into their climate transition plan as overseen by the board
several companies integrated specific tracked objectives on nature into their climate strategy - for instance targets on deforestation, sourcing of materials and water usage
one company discussed a board committee’s oversight of their LEAP (Locate, Evaluate, Assess, Prepare) assessment during the year, as an early adopter of the Taskforce on Nature-related Financial Disclosures (TNFD) reporting recommendations.
Example disclosures include Fresnillo plc (p86-87), Mondi Group plc (p42, 48), Haleon plc (p74-75)Principle 2: Strategy - The board oversees systemic integration of material risks and opportunities into organisational strategy and policy development. It steers the inclusion of climate- and nature-related considerations into decision-making to drive long-term value creation.73% of our sample integrated their sustainability strategy into the overall strategy disclosures. Climate or the environment was regularly disclosed as a pillar of the business strategy. 16% incorporated climate strategy into capital allocation disclosures.The level of integration appeared to be industry-dependent. Companies in energy, mining and resource intensive industrial sectors provided more granular disclosure, in some cases with extensive and relatively precise quantification of climate scenarios and the opportunities from future-facing products and services. One mining company for example incorporated a “sustainability snapshot” drawing out the effects of climate strategy for each major component of the group. Some companies modelled the effects of changes to carbon taxes and of decarbonisation and incorporated the associated capital expenditure into capital allocation disclosures. A reader of the annual report could form a view of the impact of energy transition on the financial prospects for these companies.Other companies, particularly from less energy-intensive sectors, were less likely to provide granular disclosures around the integration of climate into strategy and capital allocation. Where they provided disclosure, it was more likely to identify scenarios and risk categories with some level of detail, but stopping short of precise quantification. On capital allocation, some companies referred to climate alongside capital allocation simply to explain that it had no effect.40% of companies made reference to a nature-related matter in their strategy disclosures (most commonly water use or deforestation).Example disclosures include Antofagasta PLC (p16, 40-43), Rio Tinto Plc (p58)Principle 4: Disclosure and transparency - The board promotes transparency, integrity and accountability through disclosures that fairly inform investors and stakeholders. It oversees systems that enable true and fair reporting of how changes in climate and nature affect financial performance and long-term prospects.We looked at whether the annual report mentioned the board or a board committee obtaining, overseeing or using assurance over sustainability information. Although almost all companies had obtained some assurance over sustainability information, the board was mentioned in connection with this in only 41% of the annual reports in our sample. This was concentrated in those companies that have dedicated sustainability committees.In the financial statements, 91% of our sample mentioned climate change in some way, demonstrating that the message of integrating disclosure across the annual report has been heard.Does governance measure up to the WEF Principles?However, over half did this through making an explicit statement that climate change did not have a material impact on their current financial reporting judgements and estimates.A minority of those companies explained why they had reached that conclusion and the methodology they had used. The better disclosures went further to show an element of the forecasting assumptions, calculations and quantification behind the methodology, providing more confidence to the user of the annual report. This is consistent with the approach of those better disclosures where the impact of climate change was considered material.Example disclosures include London Stock Exchange Group plc (p125-6), Rolls Royce Holdings PLC (p121-123)Is there a statement in the financial statements regarding the materiality of climate change?The impact of AI and Agentic AI Last year we published a corporate reporting insight survey exploring how FTSE 100 companies reported on generative AI. In order to assess how companies have disclosed the risks, opportunities and uncertainties associated with this structural shift, we have used the findings from that survey as comparative data.96% of our sample mentioned AI in their most recent annual report (2025: 93%). A significant majority reported on the opportunities offered by AI, which ranged from those businesses in technology or media for which AI has become an integral part of their product offering, to those in pharmaceuticals that report AI as an enabler of innovation, to those that already use or plan to use AI for customer experience or operational efficiency. A handful of companies reported a significant opportunity as arising from the use of AI by others - for instance, due to provision of data centres.A small proportion of the companies that identified an opportunity relating to AI had not yet finalised the nature of that opportunity and were in the process of exploring their options.In contrast, the companies that reported on AI as part of a risk, either principal or emerging, overwhelmingly linked the risk to cybersecurity and the threat posed by attackers using AI as part of their armoury. A smaller proportion linked the risk to data security and compliance.Turning to governance, 80% of our sample mentioned AI in their corporate governance disclosures outside the context of board biographies or recruitment criteria (2025: 62%). Disclosures focused either on key strategic decisions or on the board's role as the top level of the governance structure of the organisation. Boards have given much more prominence and definition to the disclosure around governance structures over AI since our survey in 2025. Increasingly boards are also disclosing how they delegate particular topics around AI to specific committees, mainly the audit committee or risk committee.The use of and governance over Agentic AI is the next frontier topic that we expect to see discussed at more length in future annual reports. This year, 28% of our sample mentioned Agentic AI, with most of these mentions in the context of risks or future opportunities. More significant disclosures were from companies in the insurance and software industries, which were already working on incorporating AI agents into their activities.In addition to Agentic AI, we expect to see more companies comment on the future impact of AI on the workforce, whether that relates to a reduction in headcount, reskilling or a completely different set of job descriptions. At the heart of this evolution is the expectation that AI will fundamentally reshape roles and demand a re-evaluation of the employer-employee value proposition: the reason an employee comes to an organisation and chooses to stay. In On the board agenda 2026 we discussed some of the impacts of AI on the workforce and the role that governance can take in finding the right path for each individual business, including the interventions needed to drive the adoption of Agentic AI.For annual reports in 2026, companies should consider exploring some of the key questions for organisations in balancing opportunities presented by Agentic AI and security and workforce transformation considerations, recognising that this is critical to the resilience of many organisations.Example disclosures include WPP PLC (p42, 56, 85), Convatec Group plc (p45, 85)How is AI described in the annual report?To concludeOur survey of FTSE 100 annual reports confirms that companies are increasingly attuned to a business environment shaped by geopolitical matters, technological innovation, and a changing mix of societal and economic concerns. Most companies recognised the importance of drawing out these complexities with 99% disclosing geopolitical matters and 96% discussing AI. However, the nature of how companies described their longer-term approach to risk and how they balanced the competing risks, opportunities and uncertainties arising from our dynamic world varied significantly.A minority of companies told a consistent story throughout the annual report, which included the framing offered by the Chair and CEO statements, clear and comprehensive commentary in the narrative reporting, and explanation of the impacts on the financial statements.Sustainability risks were regularly discussed at board level, yet only 41% of companies demonstrated board oversight of sustainability assurance. Meanwhile AI adoption was accompanied by increasingly mature governance processes and disclosures, but most companies did not articulate the implications of newer developments such as Agentic AI or explored the impact on the workforce.None of the matters we have explored in this survey stand in isolation, and the companies varied between explicitly drawing out the trade-offs and decisions between competing priorities and presenting these trade-offs implicitly through their capital allocation disclosures.Ultimately, the most effective annual reports are those that connect risks and opportunities in a holistic way to strategy, governance, and financial outcomes and describe how the board manages the difficult trade-offs between strategic priorities and investment cases in order to achieve resilience and longer-term success, enabling shareholders to assess the governance and stewardship of the business.
Ensure that risks, opportunities, and uncertainties are consistently and transparently integrated from the Chair and CEO statements through the strategic report into the financial statements
Explain clearly how the board and its committees remain informed, oversee and take decisions on immediate geopolitical matters and longer-term structural issues such as sustainability and AI, highlighting the processes that contribute to strong governance
Explain governance and oversight over strategic and capital allocation trade-offs
Consider forward-looking disclosures regarding the impact of advancements in technology and Agentic AI, their impact on the business model and the workforce, and related security considerations, since this will be critical to the ongoing resilience of many organisations
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Veronica PooleGlobal IFRS Leader, NSE Head of Accounting and Corporate Reporting
