The Government has recently published three consultations about the UK's sustainability regulations.
Collectively, these consultations form part of the first phase of consultations to modernise the UK’s framework for corporate reporting. This evidence from the responses, will inform future government decisions when it considers whether to require firms to report sustainability information using the standards.
The first consultation seeks views on the draft of the UK Sustainability Reporting Standards (UK SRS), which are based on the standards published by the International Sustainability Standards Board (ISSB™) in June 2023. The consultation proposes some minor amendments to the standards, to reflect their use in a UK context, while retaining the advantages of international comparability that the ISSB Standards are intended to achieve. In addition, the consultation seeks views on the costs and benefits of UK SRS – which will inform future government decisions on whether to require economically-significant companies to disclose information in accordance with UK SRS.
The second consultation focuses on providers of assurance over sustainability-related financial disclosures following the conclusion of the Financial Reporting Council’s (FRC) recent market study on this theme. In particular, the government is seeking views on a proposal to introduce a registration regime operated by the Audit, Reporting and Governance Authority (ARGA) once established. The regime would recognise assurance providers as being capable of assuring information disclosed against UK SRS, European Sustainability Reporting Standards (ESRS) and any jurisdictional standards that are aligned to the ISSB Standards.
The third consultation – published by the Department for Energy Security and Net Zero – seeks views on the government’s manifesto commitment on the theme of transition planning. This consultation seeks stakeholder views on how transition plan requirements should be taken forward and the government is particularly keen for views on the role of transition plans alongside UK SRS.
The government is keen to ensure that investors have information they need to make informed decisions about the sustainability-related risks and opportunities that would reasonably be expected to affect an entity’s financial prospects. At present, requirements are already in place through climate-related disclosure obligations introduced in 2022. Reflecting significant international developments in recent years, the government is considering how to build on those requirements to create an enhanced regime for sustainability-related financial disclosures that is fit for the future.
The BVRLA will be responding to all three consultations, which close on 17 September. If you would like to be involved, contact [email protected].
Members can use the consultations as an opportunity to feed into Government's thinking in shaping the sustainability reporting landscape. This is your chance to raise any sector-specific issues with the Government's plans. Also contact [email protected] if you would like to join the BVRLA’s ESG Working Group where input will be sought for the BVRLA responses.
The three consultations are:
Department for Business and Trade consultation on UK Sustainability Reporting Standards
Department for Business and Trade consultation on Developing an oversight regime for assurance of sustainability-related financial disclosures
Department for Energy Security and Net Zero consultation on Climate-related transition plan requirements
