The UK is laying the groundwork to create UK Sustainability Disclosure Standards (UK SDS) as discussed in a recent guidance document from the UK government. According to the document, the UK SDS will form the basis of future sustainability reporting mandates. The UK SDS will also conform closely to the IFRS’ Sustainability Disclosure Standards under the ISSB and will deviate only when absolutely necessary for UK-specific matters.
The UK has established the Sustainability Disclosure Technical Advisory Committee (TAC) which will assess the IFRS Sustainability Disclosure Standards and provide guidance for implementation in the UK SDS. The guidance states that:
“TAC will assess IFRS Sustainability Disclosure Standards on a technical basis and provide independent recommendations on endorsement to the Business and Trade Secretary, via DBT. DBT will also provide TAC with relevant contextual information. TAC will be formed of a chair and members from a range of relevant professional backgrounds, due to be appointed shortly.”
The UK SDS will not introduce a reporting requirement but will be incorporated into future reporting requirements by reference. The guidance states that any decision to mandate disclosures under the UK SDS will be left to the UK Government and the Financial Conduct Authority (FCA). Of course we will continue to track the development of the SDS and other nations’ responses to the new ISSB standards.