The UK Government has published guidance on its framework to create UK Sustainability Disclosure Standards (UK SDS) confirming that 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.
Recognising the importance of disclosures that are globally comparable and useful for investor decision-making purposes, the guidance states that the UK SDS will only divert from the global baseline if ‘absolutely necessary for UK specific matters.’
The guidance also confirms that the UK Government will have responsibility for determining the extent to which disclosures are required for UK registered companies and limited liability partnerships, and that the Financial Conduct Authority (FCA) will be responsible for those decisions for UK listed companies.
Two committees have been established to support with the assessment and endorsement of the IFRS Sustainability Disclosure Standards as follows:
- The UK Sustainability Disclosure Technical Advisory Committee (TAC) who, supported by the Financial Reporting Council (FRC), will assess the IFRS Sustainability Disclosure Standards on a technical basis and will provide independent recommendations on endorsement to the Business and Trade Secretery, via the Department for Business and Trade (DBT). The TAC secretariat has already published a call for evidence on IFRS S1 and IFRS S2.
- The UK Sustainability Disclosure Policy and Implementation Committee (PIC) who will be managed and overseen by DBT and will provide advice on an endorsement decision to the Business and Trade Secretary, based on TAC and PIC’s recommendations. Subject to the outcome of an endorsement decision, PIC will also coordinate the implementation of UK SDS by the UK Government and the FCA. PIC’s membership will consist of UK government departments and regulators.
For more information, read the guidance on the UK Government’s website.