Background to the standards

The creation of the International Sustainability Standards Board (ISSB) was announced at COP26, the 2021 UN Climate Change Conference in Glasgow, with the role of creating a global baseline for sustainability reporting. The ISSB is a standard-setting board of the International Financial Reporting Standards (IFRS) Foundation, a not-for-profit organisation that sets global corporate reporting standards through the International Accounting Standards Board (IASB).

The ISSB’s overriding aim is to provide standards that deliver comparable and decision-useful information for investors – the disclosures required by their standards isare intended to help investors to compare information between companies, supportsupporting the efficient allocation of capital, and the smooth running of capital markets.

ISSB published its first 2 new standards on 26 June 2023. They are:

• IFRS S1: General Requirements for Disclosure of Sustainability-related Financial Information
• IFRS S2: Climate-related Disclosures

What the UK is doing

The UK government has been a strong supporter of the ISSB since its launch.launch Inand its mobilisingsees greenits investment:work 2023as greenconsistent financewith strategy, the UK governmentgovernment’s laidaim plans to establishmake athe frameworkUK toa assessglobal thecentre suitabilityfor of IFRS S1sustainable and IFRS S2finance. forIn endorsementNovember in2024, the UK.

Ifpress thisnotice assessmentaccompanying processthe concludesChancellor’s withMansion anHouse affirmativespeech endorsementspoke decision,about itour wouldambition resultto in“deliver thea creationworld-leading ofsustainable thefinance firstframework”, twoincluding UK Sustainabilityconsulting Reporting“on Standardseconomically (SRS),significant whichcompanies woulddisclosing beinformation basedusing upon IFRS S1future and IFRS S2.UK Sustainability Reporting Standards”.

The UK government aimsis tonow consultconsulting on the exposure drafts of the UK SRSversions inof QuarterIFRS 1S1 2025.and TheseIFRS standardsS2 will– formrespectively partcalled ofUK aSRS widerS1 Sustainabilityand DisclosureUK ReportingSRS frameworkS2. ledThe byconsultation HMis Treasuryopen –until for17 moreSeptember information,2025, seealongside the SDRa Implementationconsultation Updateon (May 2024).

Once the assessmentdevelopment processof isan complete,oversight andregime subjectfor toassurance anof affirmativesustainability-related endorsementfinancial decision,disclosures.

Following thethis Financialconsultation Conductprocess, Authoritythe (FCA)UK government will bepublish ablefinalised toversions useof UK SRS toS1 introduceand requirementsUK forSRS UK-listedS2 companiesfor tovoluntary reportuse sustainability-relatedlater informationthis toyear. theirSubsequently, investors,the subject to a consultation process.

The government hasand alsothe committedFinancial toConduct consultAuthority on(FCA) economicallywill significantconsider companieswhether disclosingto informationintroduce usingrequirements futurefor certain UK SRS,entities followingto thereport creationagainst ofthese the standards.

For more information on our work on UK SRS, see our Framework and Terms of Reference for the Development of UK Sustainability Reporting Standards.

To assist with the assessment and endorsement of IFRS S1 and IFRS S2, and any implementation of resulting UK SRS, the UK government has established 2 committees, an independent Technical Advisory Committee (TAC) and a Policy and Implementation Committee (PIC).

UK Sustainability Disclosure Technical Advisory Committee (TAC)

The purpose of the TAC is to assess IFRS Sustainability Disclosure Standards on a technical basis and provide independent recommendations on endorsement to the Business and Trade Secretary. TAC is formed of a chair and members from a range of relevant professional backgrounds. More information is available via the Financial Reporting Council (FRC) website and a news article on GOV.UK.

TAC’s operations are supported by the FRC, including the provision of a secretariat.

The The TAC secretariat publishedprovided a callits forfinal evidencereport on and recommendations in December 2024. It recommended that IFRS S1 and S1 and IFRS S2, whichS2 closedare onendorsed 11for OctoberUK 2023.use, Responseswith aresome availableminor toamendments. readThe on the FRC website.UK Thegovernment responseshas willreflected assistthe the TAC as’s itrecommendations developsin recommendationsits consultation on the endorsementexposure of IFRS S1drafts and IFRSof UK SRS S2.

Public papersS1 and meetingsUK recordingsSRS areS2. availableYou can read the report in full on the FRC website.

The and demonstrate the TAC’s progress.secretariat Itpublished isa call for evidence on trackIFRS S1 and IFRS S2. This call for evidence and responses to provideit itsare recommendationsavailable into goodread time.on the FRC website.

Public papers and meetings recordings are available on the FRC website.

UK Sustainability Disclosure Policy and Implementation Committee (PIC)

PIC is formed of UK government and regulator representatives and its main role is to coordinate the implementation of any UK SRS. The members of the PIC will also, as a secondary function, consider whether the endorsement of any IFRS Sustainability Disclosure Standard has significant interactions with the remits of their respective organisations.

PIC’s membership consists of UK government departments and regulators, including:

• Bank of England
• Department for Energy Security and Net Zero (DESNZ)
• Department for Environment, Food and Rural Affairs (Defra)
• Department for Work and Pensions (DWP)
• Financial Conduct Authority (FCA)
• Financial Reporting Council (FRC)
• HM Treasury
• the Foreign, Commonwealth and Development Office (FCDO)
• UK Endorsement Board (UKEB)

It will also be used for different members to share information:

• on their influencing activities related to the development of standards
• to help Department for Business and Trade (DBT) officials advise the Business and Trade Secretary
• on relevant contextual matters that DBT can share with TAC

PIC meetings are held in private. However, you can read summary minutes from PIC meetings.

Feedback

If you have any questions or comments on this work, you can contact UK.SRS@businessandtrade.gov.uk