ICAS has urged stakeholders to actively contribute their feedback since the June launch of the highly anticipated consultations on sustainability reporting standards, assurance of sustainability reporting, and climate-related transition plan requirements. Ahead of yesterday’s submission deadline, ICAS gathered member views through a survey and hosted a workshop with representatives from the Department for Business and Trade (DBT) and the Department for Energy Security and Net Zero (DESNZ) to help shape the accountancy profession’s response.

Fiona Donnelly CA, director of sustainability at ICAS, said: “ICAS fully supports the government’s ambition for the UK to lead globally on sustainable finance, and we view these consultations as a vital step in modernising the non-financial reporting landscape.

“In our responses, we have called for a clear, consistent, and proportionate reporting regime that delivers meaningful information for all users, reduces unnecessary regulatory burdens, and has uniform application criteria across the market. We have also urged the government to seize this once-in-a-generation opportunity to strike the right balance between enabling international comparability while giving businesses the flexibility to tell their own story.”

Summarising ICAS’ response to the draft UK Sustainability Reporting Standards (UK SRS), Ms Donnelly commented: “While we view the UK SRS’ endorsement of the standards originally issued by the International Sustainability Standards Board as a move in the right direction, and broadly agree with the UK government’s proposed amendments, we still think that the UK SRS should go further.

“More comprehensive and holistic reporting would be achieved by expanding these standards to include reporting on the impact of organisations on the environment and society. This ‘double materiality’ approach, long championed by ICAS and embraced in Europe, would better serve the needs of multiple stakeholders and support the long-term public interest.”

In relation to proposals for regulatory oversight of sustainability assurance providers, she added: “We agree with the government’s conclusion that the sustainability assurance market would benefit from regulatory oversight and support the Audit, Reporting and Governance Authority (ARGA) being given powers to register and oversee providers.

“However, given the importance of this issue, we question the need to wait until ARGA is established and suggest the Financial Reporting Council (FRC) begin developing a register of sustainability assurance practitioners in the interim.

“While we support a profession-agnostic approach to sustainability assurance, this should be underpinned by clear criteria that all practitioners must meet; covering experience, expertise, performance, quality, and ethics standards as a minimum. The government should consider mandating assurance of UK SRS disclosures for certain public interest companies in the medium term, with this scope extending as the market matures to apply to all companies that are subject to mandatory sustainability reporting.”

On the options presented to take forward climate-related transition plan requirements, she concluded: “ICAS supports requiring organisations to develop and disclose transition plans, but recommends a three-to-five-year timeframe before implementing this to allow reporters to upskill appropriately.

“We believe transition plans should be standalone documents, updated every three years and linked to company strategy, with annual reporting used to report progress. We don’t support mandating transition plan implementation, as this could prove difficult to enforce and unintentionally discourage ambitious plans.

“We also urge the government to consider how the scope of the requirements could be widened to include high emitters, and advocate for transition planning to be aligned with UK SRS to avoid duplication.”

The UK government will now review responses to the consultations before setting out its policy direction later this year. ICAS will continue to engage with DBT, DESNZ and wider stakeholders to make sure the accountancy profession’s expertise informs the development of a world-leading sustainable finance framework.