Legal & Regulatory News

UK Government publishes guidance on framework to create UK Sustainability Disclosure Standards

On 2 August 2023, the UK Department for Business and Trade (DBT) released guidance on the UK government’s framework to create UK Sustainability Disclosure Standards (SDS). The SDS will establish sustainability-related corporate disclosure standards on ESG risks and opportunities. Such disclosures are intended to form the basis of future legislation and regulation.

The SDS will be based on the International Financial Reporting Standards (IFRS), created by the International Sustainability Standards Board. The IFRS baseline allows for a level of interoperability and globally comparable disclosures. The Secretary of State for Business and Trade is set to consider the endorsement of IFRS Sustainability Disclosure Standards, to create the SDS by July 2024.

The UK government has established two committees in order to assist with endorsement considerations, namely the: -

• Technical Advisory Committee (TAC); and
• Policy and Implementation Committee (PIC).

The TAC will provide technical assessments of the IFRS, supported by the Financial Reporting Council, and will provide independent recommendations on endorsement. The TAC has opened a call for evidence on the IFRS S1 and IFRS S2 which is set to close 11 October 2023. The chair and committee members of the TAC are to be appointed in due course.

The PIC is managed and overseen by the DBT. PIC’s work will include an analysis of the interactions between IFRS and existing UK legislation and regulation. Composed of UK government departments and regulators, the PIC will work alongside the TAC to advise the Business and Trade secretary. The PIC is also tasked with the implementation of the UK SDS if endorsement of the standards goes ahead.  

Click here to read the press release.

Click here to read more about the IFRS.

Click here to access the TAC’s call for evidence.