The Institute of Chartered Accountants of Scotland (ICAS) said that it welcomes the Financial Conduct Authority’s (FCA) plans to reshape listed company sustainability reporting around the UK Sustainability Reporting Standards (UK SRS).
In its response to Consultation Paper CP26/5, ICAS backed the proposal to replace the current climate disclosure rules with requirements built on UK SRS S2 for climate-related disclosures, alongside an option to use UK SRS S1, “General Requirements for Disclosure of Sustainability-related Financial Information”
ICAS said it supports FCA’s intent and to provide clarity on the application of the UK SRS. It added that the FCA is effectively “setting the trajectory in the market” for the pace and scope of adoption, along with the reliefs that will apply. The institute said bringing UK rules into line with IFRS sustainability disclosure standards is key to improving global comparability and shoring up investor confidence.
It said it also supports proportionality and believes the shift from current rules to the new framework should be clear, gradual and well signposted. However, ICAS raised concerns that some proposed reliefs could weaken reporting. It said sustainability reporting “shouldn’t go backwards” and warned the FCA’s proposed reliefs could weaken comparability of UK SRS disclosures at home and abroad.