UK announces new ESG reporting standards

The UK government has announced new reporting standards for corporate sustainability disclosures.

The UK Sustainability Disclosure Standards (SDS) will form the basis of any future requirements in UK legislation or regulation for companies to report on risks and opportunities relating to sustainability including climate change.

Published by the Department for Business and Trade, the standards will be based on the IFRS Sustainability Disclosure Standards issued by the International Sustainability Standards Board (ISSB). The Secretary of State for Business and Trade will consider the endorsement of the IFRS Sustainability Disclosure Standards, to create UK SDS by July 2024.

By using the IFRS Sustainability Disclosure Standards as a baseline, the aim is for the information companies disclose under UK SDS to be globally comparable for investors. ISSB published its first 2 new standards on 26 June 2023:

IFRS S1: General Requirements for Disclosure of Sustainability-related Financial Information
IFRS S2: Climate-related Disclosures

The UK SDS will only divert from ISSB standards if absolutely necessary for UK-specific matters, the government says. The ISSB is currently running a consultation on the implementation of ISSB standards in the UK, with a call for evidence open until 11 October.