SPOTTED:
Plan for New Sustainability Disclosure Requirements in the UK
SPOTTED:
Plan for New Sustainability Disclosure Requirements in the UK
The UK government announced plans to introduce new Sustainability Disclosure Requirements (SDR’s), which will be another addition to the sustainability framework, next to TCFD requirements. According to John Glen, the UK will shape the new requirements drawing heavily from the EU’s sustainability approach and the Global Reporting Initiative (GRI).
Currently, shaping EU sustainability reporting standards is underway at EFRAG, which has entered into a cooperation agreement with GRI. The PSF has also published a consultation paper regarding the EU Taxonomy.
Key points on UK Sustainability Disclosure Requirements
- The SDR’s will apply to financial services firms, companies and pension funds.
- The SDR’s will require these companies to report the impact of their organisation and financial products on climate change and the environment.
- The SDR’s will be more comprehensive than the TCFD framework and require more comprehensive disclosures.
Here’s what we know on SDR’s
They will apply the “double materiality” concept.
The double materiality concept, already present in the GRI standards, requires that companies report the impacts of climate change on their organisations as well as how their own business activities can contribute to climate change.
The scope of SDR reporting will be more detailed than TCFD.
The double materiality concept, already present in the GRI standards, requires that companies report the impacts of climate change on their organisations as well as how their own business activities can contribute to climate change.
The SDR roll-out will be phased across a five-year timeframe.
The double materiality concept, already present in the GRI standards, requires that companies report the impacts of climate change on their organisations as well as how their own business activities can contribute to climate change.
What does this mean for companies?
Although the announcement of introducing SDR’s may come as a surprise, peeling through the “onion” of sustainability initiatives reveals that it is an integral part of shaping a sustainability framework that will to some extent mirror legal requirements of the EU, particularly the Sustainable Finance Disclosure Regulation (SFDR) and Corporate Sustainability Reporting Directive (CSRD), as well as the classifications reflected in the EU Taxonomy (the UK has established a Green Technical Advisory Group to create a UK taxonomy).
How can we help?
While many sustainability aspects are still in the planning and development stages, there are a few points that should be on the top of any agenda for companies preparing for sustainability-related disclosures:
- Keeping an eye on sustainability developments, also in the EU (see more here).
- Establishing a clear vision for how sustainability reporting should be integrated into compliance and reporting processes.
- Develop a shared understanding of sustainability reporting requirements across the company. This can be done with the support of tools designed to map data requirements into clear data concepts understandable by business and IT teams, such as our ATOME Matter platform.
We are also currently exploring the area of mapping sustainability data requirements in the GFIN Cross-Border testing initiative and the G20 TechSprint. Read more on our activities here:
The green mile for sustainability – BR-AG selected for GFIN Cross-Border Testing
Driving sustainability through innovation. We are shortlisted in G20 TechSprint 2021!
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