UK Advisory Committee calls for adoption of IFRS sustainability reporting standards

Today, UK Sustainability Disclosure Technical Advisory Committee (TAC), commissioned by the government, has published recommendations on the adoption of the International Sustainability Standards Board (ISSB) of the IFRS Foundation for UK Companies.

These recommendations, published by Financial Reporting Council (FRC), originating from UK Green Finance Strategy released last year, in which the government committed to reviewing IFRS climate and sustainability reporting standards as soon as they are released.

Common Sustainability Reporting Standard (IFRS S1) and climate (IFRS S2) is issued by IFRS in June 6. After that, IOSCO, the leading international policy forum and standards-setting body for securities regulators, has called on regulators to incorporate these standards into their sustainability reporting regulatory frameworks. Currently, more than 30 countries, accounting for 57% of global GDP, has signaled a shift towards adopting these standards.

The TAC was tasked by the government in May 5 to provide advice on the applicability of the standards.

While the TAC supports the adoption of IFRS S1 and S2, it also proposes some amendments. Most notably, while the ISSB proposed a “climate-first” solution that would allow companies an additional year to provide reporting on certain sustainability-related risks, the TAC recommends extending this period to two years.

Sally Duckworth, Chairman of TAC, said:
“The TAC has been conducting a thorough review for many months, carefully examining the IFRS sustainability reporting standards. Our report, presented to the Minister, recommends that the UK adopt these standards to strengthen the country’s leadership in sustainability reporting.”