Regulatory updates and insights

UK momentum behind ISSB Standards adoption

The International Sustainability Standards Board (ISSB) Standards are gaining significant traction worldwide. Over 20 jurisdictions, representing nearly 55% of global GDP and over 40% of global market capitalisation, have taken substantial steps towards integrating ISSB Standards into their regulatory frameworks. This rapid evolution in the global regulatory landscape requires ongoing updates and insights. We wanted to provide an overview of the latest developments regarding the ISSB Standards and their impact on sustainability disclosure frameworks, particularly for UK listed organisations.

The UK is gaining momentum and taking proactive steps towards endorsing and implementing ISSB Standards. Here are the key milestones and future steps in this significant regulatory journey:

UK authorities initiated the endorsement process with a Call for Evidence, inviting stakeholders to share their perspectives and insights on the adoption of ISSB Standards.

The Department for Business and Trade provided detailed guidance on the endorsement process for ISSB Standards. This comprehensive plan outlines the necessary steps to ensure smooth integration into the existing regulatory framework.

A final vote on the recommendations is scheduled for December 2024, with the entire process expected to be completed by the first quarter of 2025.

The Financial Conduct Authority (FCA) is a pivotal player in the UK's journey towards adopting ISSB Standards. The FCA plans to consult on mandatory disclosure rules that will reference the UK-endorsed ISSB Standards. This consultation process is crucial as it will gather feedback from various stakeholders, ensuring that the final rules are robust and comprehensive.

Additionally, the FCA encourages listed companies to voluntarily adopt ISSB Standards ahead of mandatory implementation. This proactive approach is facilitated by the existing compliance framework that many UK companies already adhere to, particularly the TCFD-aligned climate-related disclosure rules and other relevant frameworks.

UK companies are well-positioned to embrace ISSB Standards as they are already familiar with TCFD-aligned disclosure rules. The transition to ISSB Standards is expected to be seamless for many, as they are equipped with the necessary infrastructure and expertise for comprehensive sustainability reporting.

The adoption of ISSB Standards represents a significant shift towards more transparent and standardised sustainability reporting. As jurisdictions around the world – including the UK – move towards integrating these standards into their regulatory frameworks, companies must stay informed and prepared for these changes. This ongoing evolution highlights the importance of having key partners for your organisation to ensure your teams are staying ahead and gaining insights to navigate the dynamic regulatory landscape effectively.

In June 2023, we attended the IFRS conference, where the International Sustainability Standards Board (ISSB) introduced the inaugural IFRS S1 and IFRS S2 standards, representing a major advancement in global sustainability reporting.

Since then, we have kept abreast of all related developments and have been actively supporting our clients who aim to be early adopters or want to be prepared for a potential mandatory adoption of the ISSB Standards. Our guidance and proposed solutions have been welcomed as highly supportive, as they plan to transition from TCFD-aligned reporting to comply with the new standards. If you need guidance or an assessment of your report to ensure it meets ISSB compliance, we invite you to get in touch.