UK-specific sustainability disclosure standards are expected to publish next year, a UK government publication announced. The UK sustainability disclosure standards (SDS) will set out corporate disclosures on the sustainability-related risks and opportunities that companies face, the publication said.
The standards will be based on the IFRS standards issued by the International Sustainability Standards Board, the publication from the Department for Business and Trade (DBT) said, and will only divert from the global baseline if necessary for UK-specific matters.
“They will form the basis of any future requirements in UK legislation or regulation for companies to report on risks and opportunities relating to sustainability matters, including risks and opportunities arising from climate change,” the publication said in a post earlier this month. “The disclosures required by these standards will help investors to compare information between companies, thereby aiding decision making; supporting the efficient allocation of capital, and smooth running of the UK’s capital markets.”
To assist in the development of the SDS, the UK government has established two committees: UK Sustainability Disclosure Technical Advisory Committee (TAC) and UK Sustainability Disclosure Policy and Implementation Committee (PIC).
“TAC will assess IFRS … standards on a technical basis and provide independent recommendations on endorsement to the Business and Trade Secretary, via [the] DBT,” the publication said. “PIC … will provide advice on an endorsement decision to the Business and Trade Secretary, based on the recommendations from TAC and PIC’s work, [including] PIC’s analysis of the interactions between IFRS … standards and existing UK legislation and regulation.”
The TAC has also issued a call for evidence “on whether application of these standards in a UK context will result in disclosures that are understandable, relevant, reliable, and comparable for investors”, a news release from the Financial Reporting Council said.
Responses are welcome from those preparing corporate disclosures, investors, and other stakeholders with an interest in sustainability reporting, the news release continued. They should be emailed by 11 October to UKSustainabilityTAC@frc.org.uk.
The UK government expects the standards to publish by July 2024.
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