According to a recent Deloitte survey, 93% of FTSE 100 companies mentioned AI in their 2024 annual reports, compared to 50% in 2023. In addition, 68 companies mentioned AI when reporting on the risks they face, a substantial increase from 11 in 2023.
Deloitte’s survey of annual reports, Corporate reporting insights 2025, focuses on three main areas of disclosure by FTSE-listed companies in December 2024: climate, Gen AI, and controls and assurance.
16 companies disclosed that one or more directors had experience or expertise in AI
The findings relating to AI show the biggest changes year on year of all these three areas. For example, 16 companies this year drew out in their disclosures that one or more directors had experience or expertise in AI, in contrast to just six companies in 2023.
The section relating to AI and Gen AI disclosures focuses on the reported risks, opportunities, policies and controls, as follows.
Climate disclosure
Regarding climate disclosures, the report considers how ready companies are to report under the draft UK Sustainability Reporting Standards (UK SRS 1, General Requirements for Disclosure of Sustainability-related Financial Information; and UK SRS 2, Climate-related Disclosures, which incorporates the Task Force on Climate-related Financial Disclosures Recommendations and Recommended Disclosures).
7% stated that ISSB standards had been taken into consideration when preparing disclosures
The report draws out key areas of difference between the TCFD recommendations and the disclosure requirements in draft UK SRS S2 ‘to assist companies looking to identify the differences between their current reporting practices and the requirements of the anticipated UK SRS’.
It found that all but two companies stated that their disclosures are consistent with the TCFD recommendations; the majority referred to UK SRS or ISSB in their disclosures.
Controls and assurance
With the 2024 Corporate Governance Code becoming effective from 1 January 2025, except for Provision 29 – the board’s declaration on the effectiveness of material controls – which will apply to reporting periods beginning on or after 1 January 2026, Deloitte focuses on how 50 FTSE 350 December 2024 reporters have approached preparing for the declaration and other aspects relating to Provision 29.
It found that 88% of companies included some description of how risk appetite is used as part of the risk management framework, but there was significant variation in the depth and quality of the information provided.
Better reporters demonstrated the risk management framework in a diagram
The survey also looked at how these companies described the different risk appetite categories used or the factors affecting the level of risk appetite. Half of the companies that included some description of how risk appetite is used also provided clear additional disclosure on risk appetite categories and/or factors such as financial objectives, strategic objectives set by the board and ethics, reputation and values.
Better reporters demonstrated the risk management and internal control framework in a diagram, clearly explaining how risk and control cycles operate. Some companies disclosed the risk appetite for each principal risk, explaining the factors that impacted the level allocated.
Other findings are highlighted below.
