Accountants are “leading the charge” on sustainability reporting

Speaking at the ICAS Sustainability Summit in London on 23 April, Andrew Death, Deputy Director of Corporate Reporting, Assurance and Governance at the Department for Business and Trade, reassured the audience that the consultation will be announced "soon". Though he stopped short of confirming a date, he emphasised that the next phase of the UK SRS rollout is firmly on the horizon. 

This fourth consultation will focus on streamlining corporate reporting and easing the compliance burden on businesses. This will follow three imminent consultations addressing the endorsement of UK SRS, the sustainability assurance provider framework, and transition planning to deliver on the Labour manifesto promises around mandating the need to develop and implement transition plans. 

Addressing attendees at the ICAS Sustainability Summit, Andrew Death said: “As well as looking at the new UK reporting standards, we’re also looking to review what’s there at the moment. So, there will be a consultation, not in the first consultation package, but later in the year to try and review and come up with ideas as to how we can rationalise and reduce the overarching burden of corporate reporting and focus on decision useful information.” 

He went on to discuss the approach the UK government is taking to the consultation, adding: “We are taking the approach of introducing these standards based on what investors and corporates are telling us they wish for and trying to provide the reporting framework with investor-useful and decision-useful information.” 

Those attending were reminded that the standards allowed for flexibility so that reporters can disclose more if it considered useful for reporting, and ultimately, that sustainability reporting will evolve over time. An equivalence of UK SRS with other standards would be ideal, so that reporters would have to report under only one set of requirements.  

The event’s keynote speaker, Sally Duckworth, Chair of the UK Sustainability Disclosure Technical Advisory Committee (TAC) reiterated her warning to small and medium-sized businesses not to risk falling behind competitors when it comes to sustainability reporting. 

Sally said: “Sustainability is now a front-and-center aspect of business decision making. Sustainability reporting should be seen not as a burden, but as an opportunity and businesses that fail to act risk falling behind. That could mean losing access to affordable capital, strategic partnerships and long-term growth opportunities. Even if not mandated, you'll be affected, and early adopters will secure more business and be seen as leaders.”  

On how businesses can prepare for the UK SRS, Sally offered advice on where to start: “Work out what really matters to you. Start with what matters most and don’t try and do it all at once. Focus on key metrics relevant to your company and start with those. You can then add on to them in time and each year improve and enhance on what you’re reporting on and building data collection into your processes.” 

“Even if you’re not mandated, you will be affected. Many small and medium-sized businesses assume they won’t be impacted by this and it’s only for larger, listed companies. But that’s just not true. Larger corporates will push ESG expectations down the supply chain because they’ll have to report on it.”