The UK’s Financial Conduct Authority (FCA) will be consulting in the first quarter of 2024 on proposals to implement sustainability disclosure rules incorporating the International Sustainability Standards Board’s (ISSB) IFRS S1 and S2 standards for listed companies.
The FCA aims to finalise its policy position by the end of 2024 and bring new requirements into force for accounting periods beginning on or after January 1, 2025. Reporting would begin from 2026.
The UK government first announced its Sustainability Disclosure Standards (SDS) earlier this month, noting that they will utilise the ISSB framework as a baseline and will only deviate from it when accounting for UK-specific matters.
“At the same time as consulting on our policy approach in relation to the ISSB standards, we’ll consult on guidance that will set our expectations for listed companies’ transition plan disclosures,” the FCA said in a market bulletin.
The watchdog further referenced the ISSB’s recent consolidation of the Task Force on Climate-related Financial Disclosures (TCFD) framework, which is mandated in the UK for in scope companies, noting that it had “previously stated that we intend to consult on updating our TCFD-aligned disclosure rules for listed companies to refer to the UK-endorsed ISSB standards.”
The FCA’s consultation is a significant step forward in the development of sustainability disclosure standards in the UK. The ISSB standards are designed to provide a global baseline for sustainability reporting, and their adoption by the FCA would help to ensure that UK-listed companies are providing investors with the information they need to make informed decisions.
The adoption of sustainability disclosure standards is a key part of the UK government’s commitment to achieving net zero emissions by 2050.
