The United Nations Global Compact (UNGC) has released a crucial summary to help UK businesses navigate the upcoming Sustainability Reporting regulations. Here’s what you need to know:
1. New Mandatory Sustainability Disclosure Requirements:
The UK government is set to adopt ISSB standards (IFRS S1 & S2), introducing mandatory Sustainability Disclosure Requirements. This will affect both listed and large private companies. The new regulations will replace the existing TCFD disclosure requirements, which will be integrated into the IFRS S2 standard. Listed companies will be required to begin mandatory disclosures by 2026, covering data from the fiscal year 2025.
2. ESRS Reporting for UK Businesses:
Approximately 1,000 UK businesses will need to comply with the European Sustainability Reporting Standards (ESRS) as part of the Corporate Sustainability Reporting Directive (CSRD). The ESRS standards for non-EU companies are expected by 2026, with disclosures required by 2029, based on fiscal year 2028 data.
3. Interoperability and Materiality Assessments:
The ESRS and IFRS have issued guidance on interoperability for joint disclosures. Companies should conduct a Double Materiality Assessment promptly. This approach addresses both IFRS’s Single (Financial) Materiality and ESRS’s Impact Materiality, ensuring comprehensive disclosure.
4. Preparation Recommendations:
UNGC advises companies to foster cross-functional collaboration and utilize expertise in financial reporting, along with implementation guidance and stakeholder engagement. Investing in data collection and reporting technology is also crucial for producing accurate and efficient disclosures.
For a detailed overview, read the full UNGC report here.
Additionally, a visual summary from the UK ESG regulation brochure, prepared by Nossa Data for the IR Society Conference, offers further guidance on timelines and preparation. Download the brochure here.
