Traded, banking, insurance or insurance-market company
The full statement: the five matters and the climate disclosures.
s.414CB(1), (A1)Companies Act · Requirements
Non-financial reporting requirements in the UK: the s.414CB statement and the s.172(1) statement
The non-financial reporting requirements in UK company law are two statements in the strategic report: the non-financial and sustainability information statement under section 414CB, and the section 172(1) statement under section 414CZA.
They bind different companies, and both are now the subject of government proposals.
In brief
Non-financial reporting requirements, in brief
The non-financial and sustainability information statement is required by section 414CA of the Companies Act 2006 for large traded, banking, insurance, AIM and high-turnover companies with more than 500 employees.
For traded, banking and insurance companies it covers five matters — environment, employees, social matters, human rights, and anti-corruption and anti-bribery — and for every company in scope it carries the climate-related financial disclosures.
The section 172(1) statement is a separate requirement on every large company to describe how its directors had regard to the matters listed in section 172(1).
Both sit in the strategic report, so both are approved by the board, filed with the accounts and covered by the same offence and safe-harbour provisions.
The government’s Modernising corporate reporting consultation, open until 30 November 2026, proposes replacing the five-matter disclosures and the section 172(1) statement with baseline narrative reporting, and leaves the climate disclosures alone.
The climate limb has its own page on CFD reporting requirements, and every UK regime is set out on the UK sustainability reporting requirements hub.
In one table
The non-financial reporting requirements at a glance
Each line is one requirement and the provision that creates it.
“Statement” means the non-financial and sustainability information statement.
| Requirement | Who | Provision |
|---|---|---|
| Include a statement in the strategic report | Traded, banking, insurance, insurance-market, AIM and high-turnover companies over 500 employees | s.414CA(A1), (1), (1A), (4) |
| Report on the five matters to the extent necessary | Traded, banking, insurance and insurance-market companies only | s.414CB(1) |
| Business model, policies and due diligence, outcomes, principal risks, non-financial KPIs | As above | s.414CB(2) |
| Explain any matter without a policy | As above | s.414CB(4) |
| Climate-related financial disclosures, eight limbs | Every company in scope of the statement | s.414CB(A1), (2A) |
| Explain any omitted climate disclosure in limbs (e) to (h) | Every company in scope of the statement | s.414CB(4A), (4B) |
| Section 172(1) statement | Companies preparing a strategic report that are not medium-sized | s.414CZA |
| Board approval and signature of the strategic report | Every company preparing one | s.414D(1) |
The Companies Act route sits beside the FCA’s listing rules, which are read on the UK SRS reporting requirements page.
Who must report
Who the non-financial reporting requirements bind
Section 414CA(1) lists five kinds of company: a traded company, a banking company, an authorised insurance company, a company carrying on insurance market activity, and a company with securities admitted to AIM.
Subsection (1A) adds a high-turnover company: turnover of more than £500 million, or, for a parent, group turnover of more than £500 million net, proportionately adjusted for a period that is not a year.
Every limb is then subject to the exclusions in subsections (3) to (7), so a company with no more than 500 employees, or a parent whose group has no more than 500, is out.
A company that is subject to the small companies regime or qualifies as medium-sized under section 465 is excluded too, and the medium-sized limits have been £54 million turnover, £27 million balance sheet and 250 employees since 6 April 2025.
A subsidiary is excluded where its parent’s group strategic report includes a group statement covering it.
A “traded company” under section 474(1) is one with any transferable securities on a UK regulated market, so listed debt alone can bring a company in.
The same 500-employee and high-turnover tests are compared with the other UK size tests on the UK sustainability thresholds page.
A company with more than 500 employees that is not small or medium-sized
AIM company or high-turnover company (over £500m)
The climate disclosures only; the five matters do not apply.
s.414CA(1)(e), (1A)Any other company
No statement required, though one may be included voluntarily.
s.414CA(10)What is reported
What the non-financial and sustainability information statement contains
For a traded, banking or insurance company, section 414CB(1) requires information, to the extent necessary for an understanding of the company’s development, performance, position and the impact of its activity, on environmental matters, employees, social matters, respect for human rights, and anti-corruption and anti-bribery matters.
Section 414CB(2) says that information must include a brief description of the business model, the policies pursued on those matters and any due diligence processes, and the outcome of those policies.
It must also describe the principal risks relating to the matters and, where relevant and proportionate, the business relationships, products and services likely to cause adverse impacts, and how the risks are managed.
It must describe the non-financial key performance indicators relevant to the business.
Where the company pursues no policy on a matter, section 414CB(4) requires a clear and reasoned explanation.
The statement must, where appropriate, refer to and explain amounts in the annual accounts, under section 414CB(5).
Section 414CB(9) allows directors to leave out impending developments or matters under negotiation where disclosure would be seriously prejudicial, provided a fair and balanced understanding is not prevented.
A statement that meets subsections (1) to (6) is treated as meeting several general strategic report requirements in section 414C, under section 414CB(7).
Directors’ duty
The section 172(1) statement: what it describes and who makes it
Section 172(1) requires a director to act in the way they consider, in good faith, would most likely promote the success of the company for the benefit of its members as a whole, having regard to six listed matters among others.
Section 414CZA(1) requires the strategic report to include a statement describing how the directors have had regard to those matters when performing that duty.
The duty does not apply to a company that qualifies as medium-sized, and small companies are exempt from the strategic report under section 414B, so the statement falls on large companies.
Unlike the five-matter disclosures, it has no 500-employee floor and no listing condition, so a large private company makes it.
It applies to financial years beginning on or after 1 January 2019, under SI 2018/860.
The environment has been one of the six matters since the Act, so the statement reports on an existing duty rather than creating a new one.
| Section 172(1) | Matter directors have regard to |
|---|---|
| (a) | The likely consequences of any decision in the long term |
| (b) | The interests of the company’s employees |
| (c) | Business relationships with suppliers, customers and others |
| (d) | The impact of operations on the community and the environment |
| (e) | A reputation for high standards of business conduct |
| (f) | Acting fairly as between members |
Where and when
Where the statements are published, and by when
Both statements are part of the strategic report, not separate documents, and there is no stand-alone filing for either.
A group strategic report carries a group statement relating to the undertakings in the consolidation, under section 414CA(2).
The filing period under section 442 is nine months from the end of the accounting reference period for a private company and six months for a public company.
A company that is not required to include the statement may still include one voluntarily, as section 414CA(10) allows.
- 1
Prepare
Both statements are drafted as part of the strategic report for the financial year.
- 2
Approve and sign
The board approves the strategic report and a director or the secretary signs it, under s.414D(1).
- 3
Circulate and file
The report goes to members and is delivered to Companies House with the accounts.
- 4
Deadline
Nine months after year end for a private company, six months for a public company, under s.442.
Consequences
Approval, offences and the safe harbour
Section 414D(1) requires the strategic report to be approved by the board and signed on its behalf by a director or the secretary.
If a non-compliant report is approved, every director who knew it did not comply, or was reckless as to whether it did, and failed to take reasonable steps to secure compliance or prevent approval, commits an offence punishable by a fine.
The offence is about approving a report that does not meet the Act; it is not a quality standard for the narrative.
Section 463 limits a director’s liability to the company for the strategic report to statements known to be untrue or misleading, made recklessly, or omissions that are dishonest concealment of a material fact.
The FRC reviews strategic reports, and its January 2025 review of climate disclosures by AIM and large private companies found inconsistent quality among the companies selected.
Climate disclosures
How the statement carries the climate-related financial disclosures
Since 6 April 2022, section 414CB(A1) has required the statement to contain the climate-related financial disclosures, and the statement was renamed the non-financial and sustainability information statement by SI 2022/31.
Section 414CB(2A) lists the eight disclosures, from governance and risk management through scenario analysis to targets and key performance indicators.
Directors may omit limbs (e) to (h) where they reasonably believe them unnecessary for an understanding of the business, with a clear and reasoned explanation under section 414CB(4A) and (4B); limbs (a) to (d) cannot be omitted.
Section 414CB(6) lets a company specify a framework it has used instead of repeating the information, and the government confirmed in February 2026 that UK SRS S2 is a national reporting framework for that purpose.
The climate population is wider than the five-matter population, because it includes AIM and high-turnover companies; announcing the rules in October 2021, the government estimated that over 1,300 of the largest UK-registered companies and financial institutions would disclose.
Large LLPs have a parallel duty under SI 2022/46, reported in the strategic report or the energy and carbon report depending on the LLP.
The eight limbs are read one by one on the climate-related financial disclosures page.
Energy and carbon
How the statement relates to SECR
Streamlined Energy and Carbon Reporting is not part of the non-financial statement: it is a set of disclosures in the directors’ report under Schedule 7 to SI 2008/410, Part 7A for large unquoted companies and Part 7 for quoted companies.
Its scope test is its own: an unquoted company reports when it exceeds two of £36 million turnover, £18 million balance sheet total and 250 employees.
A company can therefore make SECR disclosures without a non-financial statement, and an AIM company can make climate disclosures under section 414CA while being treated as unquoted for SECR.
The Modernising corporate reporting consultation proposes removing the directors’ report and moving SECR into the front half of the annual report without prescribing a location, and says the Department for Energy Security and Net Zero intends to consult on SECR and ESOS later in 2026.
SECR’s own requirements are on the SECR reporting requirements page.
Proposals, not law
What Modernising corporate reporting proposes for these requirements
Everything in this section is a consultation proposal published on 7 September 2026; none of it has changed the law.
Responses close at 11:59pm on 30 November 2026.
| Current requirement | Proposal | Consultation |
|---|---|---|
| Five matters with policies, risks and KPIs, s.414CB(1)–(2) | Remove as explicit requirements; report them where financially material under baseline disclosures | ¶¶128, 132–135 |
| Policies on environment, employees, social, community and human rights, s.414C(7)(b) | Remove as explicit requirements | ¶133 |
| Section 172(1) statement, s.414CZA | Replace with a “resources and relationships” baseline disclosure | Table 4; ¶132 |
| Climate-related financial disclosures, s.414CB(A1), (2A), (4B) | No proposal; left to the post-implementation review due by spring 2027 | ¶¶132, 147–148 |
| Different thresholds for non-financial duties | Views sought on a single “very large” category, with no figure proposed | ¶¶57–58 |
The consultation proposes five baseline disclosures for the strategic report: business model, performance review, resources and relationships, company strategy, and risks.
It says companies should still report on environmental, employee, social, community, human rights and anti-corruption matters where they are financially material, and would not be prevented from using frameworks such as UK SRS and TNFD to do so.
It proposes a single threshold for baseline reporting and asks whether that should be all large companies, a new “very large” category or listed companies only.
It proposes that sustainability information may sit anywhere in the strategic report, and says the government would seek to widen section 463 if such disclosures were located outside it.
The consultation as a whole is read on the Modernising corporate reporting page.
Not in the Act
Requirements that do not exist
There is no duty for every large company to report on human rights or anti-bribery; the five matters reach only traded, banking and insurance companies with more than 500 employees.
There is no separate filing of a section 172(1) statement; it is part of the strategic report.
No fixed format, framework or assurance is required for either statement.
The proposals in Modernising corporate reporting have no commencement date, and no statutory instrument to give effect to them has been laid.
Statements still circulating that are out of date
“Large companies must include an employee engagement statement” — omitted for years beginning on or after 6 April 2025.
“Medium-sized means up to £36m turnover” — £54m since 6 April 2025.
“Banks and insurers report regardless of size” — the 500-employee floor applies to them too.
“The section 172(1) statement has been abolished” — proposed, not enacted.
Check yourself
Six statements about the non-financial requirements
Each answer names the provision it rests on.
The text of each section is on legislation.gov.uk: section 414CA, section 414CB and section 414CZA.
How the government’s September 2026 proposals sit beside UK SRS is on UK SRS and MCR.
True or false?
A high-turnover private company with 600 employees must report on human rights under s.414CB(1).
A company with listed bonds but no listed shares can be a “traded company”.
A medium-sized company must include a section 172(1) statement.
The 500-employee floor applies to banks and insurers too.
A company with no human rights policy may simply leave the matter out.
The Modernising corporate reporting consultation proposes removing the climate-related financial disclosures.
0 of 6 answered.
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Frequently asked
Non-financial reporting requirements, answered
What are the non-financial reporting requirements in the UK?
In company law there are two: the non-financial and sustainability information statement under sections 414CA and 414CB of the Companies Act 2006, and the section 172(1) statement under section 414CZA.
Both sit in the strategic report.
The first covers environmental, employee, social, human rights and anti-bribery matters plus the climate-related financial disclosures; the second describes how directors had regard to the matters in section 172(1).
Which companies must include a non-financial and sustainability information statement?
A company with more than 500 employees (or a group with more than 500) that, at any time in the year, was a traded company, a banking company, an authorised insurance company, a company carrying on insurance market activity, an AIM company, or a high-turnover company with turnover over £500 million.
Companies that qualify as small or medium-sized are excluded, and so is a subsidiary covered by its parent’s group statement.
Do AIM companies have to report on the five non-financial matters?
No. Section 414CB(1) applies the five matters only to the kinds of company in section 414CA(1)(a) to (d): traded, banking, insurance and insurance-market companies.
An AIM company or a high-turnover private company with more than 500 employees makes the climate-related financial disclosures but not the five matters.
What are the five non-financial matters?
Environmental matters (including the impact of the company’s business on the environment), the company’s employees, social matters, respect for human rights, and anti-corruption and anti-bribery matters, under section 414CB(1).
What must the statement say about each matter?
Under section 414CB(2): a brief description of the business model, the policies pursued and any due diligence processes, the outcome of those policies, the principal risks and, where relevant and proportionate, the business relationships, products and services likely to cause adverse impacts and how risks are managed, and the relevant non-financial key performance indicators.
What if the company has no policy on one of the matters?
The statement must give a clear and reasoned explanation for not pursuing one, under section 414CB(4).
What is a section 172(1) statement?
A statement in the strategic report describing how the directors have had regard to the matters in section 172(1)(a) to (f) when performing their duty to promote the success of the company: long-term consequences, employees, business relationships, community and environment, reputation, and fairness between members.
Who must publish a section 172(1) statement?
Every company that prepares a strategic report, except one that qualifies as medium-sized for the year.
Small companies are exempt from the strategic report altogether under section 414B, so in practice the statement falls on large companies.
It applies to financial years beginning on or after 1 January 2019.
Is the environment a new addition to section 172?
No. The impact of the company’s operations on the community and the environment has been one of the six listed matters in section 172(1) since the Act; the 2019 change added the duty to report on it, not the duty itself.
Where and when are the statements published?
In the strategic report, which is approved by the board, signed and filed with the annual accounts at Companies House.
A private company files within nine months of its year end and a public company within six months, under section 442.
What happens if the strategic report does not comply?
Under section 414D every director who knew it did not comply, or was reckless about it, and failed to take reasonable steps to secure compliance or prevent approval commits an offence punishable by a fine.
Section 463 limits directors’ civil liability to the company to untrue or misleading statements made knowingly or recklessly, or dishonest concealment.
How does the statement relate to the climate-related financial disclosures?
The climate disclosures are part of the same statement: section 414CB(A1) requires it to contain them, and section 414CB(2A) lists the eight.
The population for the climate limb is wider than for the five matters, because it includes AIM and high-turnover companies.
Can a company use UK SRS or another framework instead?
Section 414CB(6) lets a company specify a national, EU-based or international framework it has used to publish the information instead of repeating it.
The government confirmed in February 2026 that UK SRS S2 is a national reporting framework for this purpose.
Is SECR part of the non-financial statement?
No. SECR is a separate set of energy and carbon disclosures in the directors’ report under Schedule 7 to SI 2008/410, with its own size test of exceeding two of £36m turnover, £18m balance sheet and 250 employees.
Is the government abolishing the section 172(1) statement?
It is consulting on it.
The Modernising corporate reporting consultation, open until 30 November 2026, proposes replacing the section 172(1) statement with a “resources and relationships” baseline disclosure, and replacing the five-matter disclosures with baseline narrative reporting.
Nothing has changed in law.
Do the Modernising corporate reporting proposals change the climate disclosures?
No. The consultation says the baseline proposal would not affect the climate-related financial disclosures in section 414CB(A1), (2A) and (4B), which are under a separate post-implementation review due by spring 2027.
Do large companies still need an employee engagement statement in the directors’ report?
Not for financial years beginning on or after 6 April 2025: the employee and supplier engagement statements in Schedule 7 Part 4 to SI 2008/410 were omitted by SI 2024/1303.
The section 172(1) statement in the strategic report remains.
Sources
Primary sources
Every figure, date and status on this page traces to the instrument’s owner.
Secondary commentary is never the source for a number.
Checked against 22 sources fromlegislation.gov.ukDepartment for Business, Innovation, Science and TradeDepartment for Business and TradeFinancial Reporting CouncilGOV.UK (BEIS and HM Treasury)
- legislation.gov.ukCompanies Act 2006, section 414CA — who must include the statement
The kinds of company, the high-turnover test, the 500-employee floor and the exclusions.
- legislation.gov.ukCompanies Act 2006, section 414CB — contents of the statement
The five matters, the climate disclosures, the explain rule and the framework route. Up to date to 11 October 2026.
- legislation.gov.ukCompanies Act 2006, section 172 — duty to promote the success of the company
The six matters directors must have regard to.
- legislation.gov.ukCompanies Act 2006, section 414CZA — section 172(1) statement
The statement in the strategic report and the medium-sized exemption.
- legislation.gov.ukCompanies Act 2006, section 414D — approval and signing
Board approval, and the offence for approving a non-compliant strategic report.
- legislation.gov.ukCompanies Act 2006, section 414B — small companies exemption
Small companies need not prepare a strategic report.
- legislation.gov.ukCompanies Act 2006, section 465 — medium-sized companies
The £54m, £27m and 250 limits in force from 6 April 2025.
- legislation.gov.ukCompanies Act 2006, section 474 — “traded company”
Any transferable securities on a UK regulated market, debt included.
- legislation.gov.ukCompanies Act 2006, section 463 — liability for false or misleading statements
The safe harbour for the strategic report and directors’ report.
- legislation.gov.ukCompanies Act 2006, section 442 — period for filing accounts
Nine months for a private company and six months for a public company.
- legislation.gov.ukSI 2016/1245, regulation 1 — commencement of the non-financial statement
Financial years beginning on or after 1 January 2017.
- legislation.gov.ukSI 2018/860, regulation 1 — commencement of the s.172(1) statement
Financial years beginning on or after 1 January 2019.
- legislation.gov.ukSI 2022/31 — Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022
Added the climate disclosures and the high-turnover limb from 6 April 2022.
- legislation.gov.ukSI 2022/46 — LLP climate-related financial disclosure
The parallel duty for large LLPs.
- legislation.gov.ukSI 2008/410 Schedule 7 Part 4, as it stood on 5 April 2025
The engagement statements omitted for financial years beginning on or after 6 April 2025.
- legislation.gov.ukSI 2008/410 Schedule 7 Part 8 — large private companies’ governance statement
More than 2,000 employees, or over £200m turnover and £2bn balance sheet.
- legislation.gov.ukSI 2008/410 Schedule 7 Part 7A — SECR for unquoted companies
The energy and carbon disclosures in the directors’ report.
- Department for Business, Innovation, Science and TradeModernising corporate reporting — consultation (closes 30 November 2026)
The consultation page.
- Department for Business, Innovation, Science and TradeModernising corporate reporting — consultation document (PDF), ¶¶57–58, 119–164 and Table 4
The baseline disclosures that would replace the five matters and the s.172(1) statement.
- Department for Business and TradeGovernment response to the UK SRS consultation (web version), Chapter 3
UK SRS S2 confirmed as a s.414CB(6) national reporting framework.
- Financial Reporting CouncilFRC reviews climate-related financial disclosures by AIM and large private companies (21 January 2025)
The regulator’s finding of inconsistent quality.
- GOV.UK (BEIS and HM Treasury)UK to enshrine mandatory climate disclosures for largest companies in law (29 October 2021)
The government’s announcement of the 2022 climate limb.