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The government aims to make UK-endorsed International Sustainability Standards Board standards available in Q1 2025. It will also “consult shortly” on how large companies should disclose transition plans but has not revealed when a consultation on the UK Green Taxonomy can be expected.
With input from an independent UK Sustainability Disclosure Technical Advisory Committee, the government said on Thursday it will decide whether to endorse the inaugural ISSB standards that were published last June and aims to make UK-endorsed ISSB standards available in the first quarter of next year.
Once the standards have been endorsed by government and consulted on, the Financial Conduct Authority will be able introduce requirements for UK-listed companies to report sustainability-related information.
In addition, “subject to a positive endorsement decision, the government will also decide on disclosure requirements against UK Sustainability Reporting Standards for UK companies that do not fall within the FCA’s regulatory perimeter”.
The government said it expects a decision regarding future requirements to be taken in Q2 2025, when it will also consider whether to create exemptions from pre-existing requirements in the Companies Act 2006 for those companies that choose to use the standards on a voluntary basis.
“Any decision that the government takes on these matters will involve consultation and will require parliamentary approval for the introduction of any new legislation. As a result, any changes that may be introduced would be effective no earlier than accounting periods beginning on or after 1 January 2026,” it said.
The government co-chairs the Transition Plan Taskforce, which produced its own disclosure framework on transition plans, but now says this overlaps with transition plan disclosures in ISSB’s standards.
It said that given the overlap between IFRS S2 on climate-related disclosures and the TPT Disclosure Framework, “the FCA plans, through its consultation on implementing UK-endorsed ISSB standards, to consult on strengthening its expectations for transition plan disclosures with reference to the TPT Disclosure Framework”.
As well as an FCA consultation on “strengthening” expectations, the government will “consult shortly on how the UK’s largest companies can most effectively disclose their transition plans, meeting a key commitment of last year’s Green Finance Strategy”.
Another consultation, on whether to broaden the scope of SDR to include funds under the Overseas Fund Regime, is planned for the third quarter of the year.
On the long-awaited UK Green Taxonomy, it merely said that it “continues to work at pace and expects to consult in due course”.
A decision on whether to mandate disclosures against the taxonomy the UK is creating following its exit from the EU – which has its own taxonomy – has not yet been taken. Instead, following consultation, the government said there will be a “testing period” for voluntary disclosures and use that will last “at least two reporting years” before mandation would even be explored. A further consultation would then be issued.
