In fairness, the government has had a lot on lately.
But, one development — that stands to impact many UK companies — has attracted very little attention, and is nearing the end of its consultation period.
Now the UK’s sustainability reporting standards (UK SRS), separate, of course, from the EU’s much-vaunted and then relaxed scheme, are about to move closer to implementation, with consultation set to close next week.
The SRS is an attempt to both simplify and up the ante on what firms must report, as they work to become more sustainable. It also bids to align itself with other international standards and frameworks.
In effect, the changes as proposed would mean fairly comprehensive additional reporting obligations. These are likely to impact publicly-listed companies, but also potentially to be extended to some private businesses, and smaller and mid-sized firms.
The standards may also have a knock-on effect on other areas of governance, with the Financial Conduct Authority (FCA) due to open a consultation later this year over proposals to require listed companies to adopt the SRS as part of its listing rules.
Much of what is being proposed aligns closely to existing international standards for sustainability reporting. But, the government is also suggesting six amendments, which it says are minor, to make the approach more applicable and relevant in the UK.
As this law firm’s summary points out, most of those edits are about the timing of when companies will be compelled to report, and associated “transition relief” as they prepare to do so, with a likely voluntary reporting period to come into force initially.
While the timing will be in flux until the final standards are agreed, it all points to increased reporting obligations for UK companies, a need to understand how the new rules would increase data sharing requirements over and above what they currently do, and some potential corporate pushback ahead of the changes coming into effect.
With many companies remaining committed to sustainable change because the investments they have made in transitioning make commercial good sense, they will also likely want to consider public sentiment on the shift to a greener economy, with The Times reporting this week that there has been a huge rise in British scepticism over net zero policies.
It points out that sustainability has become polarised and politicised, but captures the mood of a nation questioning the pace, affordability and validity of the transition. Only a quarter of those questioned in a poll believed that sustainable change would bring economic benefits, while the news agenda of right-leaning publishers were also singled out as having swayed opinion.
The proposed reporting changes may place additional responsibility on companies to provide evidence that they are becoming more sustainable. Those same companies may also need to think about what else they can be doing to convince the public that such change will be net-positive for them.
