UK outlines next steps for sustainability disclosure standards
The UK Government has published further information on its plans to establish internationally coherent Sustainability Disclosure Standards (SDS) for corporations.
What does this mean: The UK SDS will form the basis of any future requirements in the UK for companies to report on risks and opportunities relating to sustainability matters and climate change. Notably:
- UK SDS will be based on standards issued by the International Sustainability Standards Board (ISSB).
- The aim is for the information companies disclose under UK SDS to be globally comparable and decision-useful for investors.
Wider background: The creation of the ISSB was announced at COP26, the 2021 UN Climate Change Conference in Glasgow, with the role of creating a global baseline for sustainability reporting. ISSB published its first two new standards in June 2023.
Next steps: An official announcement of the UK’s endorsement of ISSB – which will formally create the UK SDS – is expected by July 2024. The UK endorsed standards will only divert from the global baseline if absolutely necessary for UK specific matters.
Still in consideration: While the exact scope of impact is unconfirmed, it is expected that the requirements will apply to UK registered companies and limited liability partnerships, as well as UK listed companies.
Closely related: The Financial Reporting Council (FRC), as part of its role as secretariat to the UK sustainability disclosure technical advisory committee, has issued a call for evidence to inform the proposed adoption of ISSB standards in the UK. The deadline to submit feedback is October 11, 2023.
Bloomberg
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