UK to undertake international sustainability guidelines to crack down on greenwashing
T
he Government has introduced it is going to undertake internationally-approved sustainability requirements to assist crack down on company greenwashing and bolster London as a world monetary centre.
In an announcement on Wednesday, the Department for Business and Trade mentioned the UK’s disclosure requirements will set out guidelines on how firms share their sustainability-related dangers and alternatives.
It mentioned the principles shall be primarily based on these revealed final month by the International Sustainability Standards Board (ISSB) – a gaggle arrange at Cop27 to set international guidelines on local weather reporting.
Under the principles, companies face extra stress to publicly disclose their affect on the local weather together with on their Scope 3 emissions – which covers the services or products that they promote.
The ISSB mentioned the goal is to ascertain a standard international language during which firms report their affect, to enhance belief in local weather reporting and to assist to tell traders about sustainability-related dangers and alternatives.
The Government mentioned Business Secretary Kemi Badenoch will contemplate endorsing the worldwide requirements to create the UK Sustainability Disclosure Standards (SDS) by July 2024.
It added that the UK requirements will solely divert from the worldwide baseline “if absolutely necessary for UK specific matters”.
The Financial Conduct Authority (FCA) will oversee disclosures from UK-listed firms whereas the Government will oversee them for UK registered firms and restricted legal responsibility partnerships.
The UK has been instrumental in paving the way in which for sustainability reporting for traders and advising on the event of ISSB requirements
The Department for Business and Trade mentioned the goal is for the data that firms disclose “to be globally comparable and decision-useful for investors”.
It can even assist traders examine data between firms, help the environment friendly allocation of capital and the sleek working of the UK’s capital markets, the division mentioned.
The Policy and Implementation Committee (PIC), which incorporates the Bank of England, the FCA, the Financial Reporting Council and the Treasury, is offering recommendation on an endorsement resolution to the Business Secretary.
The UK is amongst a number of international locations, together with Canada, Japan, Singapore, Nigeria, Chile, Malaysia, Brazil, Egypt, Kenya and South Africa, to contemplate endorsing the worldwide requirements, in line with the ISSB.
The London Stock Exchange and the FCA have each welcomed the brand new requirements.
ISSB chair Emmanuel Faber beforehand informed the PA news company: “We have been really encouraged by the number of jurisdictions that have already indicated they will consider adoption.
“The UK has been instrumental in paving the way for sustainability reporting for investors and advising on the development of ISSB standards.
“We launched our standards today at the market opening of the London Stock Exchange, as well as at other exchanges around the world, and we have been in close dialogue with the UK FCA which is highly supportive of our objective to establish a common language for investors globally.”
The ISSB is a part of the unbiased International Financial Reporting Standards Foundation, which writes standardised accounting guidelines utilized in about 140 international locations.
It says the brand new guidelines on sustainability-related reporting could be launched alongside companies’ annual monetary stories.