One of the headline outcomes was the decision to forgo adding new financed emissions disclosure requirements. This ensures the UK remains aligned with the International Sustainability Standards Board’s (ISSB’s) globally established standards, with only a minor update to IFRS S2. This step reflects a commitment to maintaining streamlined, practical reporting standards.
A notable refinement includes the flexibility granted to financial sector companies to use alternative globally recognised classification systems beyond the Global Industry Classification Standard for presenting financed emissions data. This change addresses industry feedback while upholding the overall coherence of the ISSB framework.
The TAC also opted against requiring entities to specify the reporting year for financed emissions calculations, recognising that current practices often rely on prior-year data due to availability constraints. This decision was guided by discussions with ISSB representatives, who acknowledged that data estimation is a practical necessity for now. Over time, as data quality and timeliness improve, reliance on such estimates is expected to diminish.
Another key recommendation involves eliminating transitional reliefs that permitted a delay in publishing sustainability reports alongside financial statements. By requiring simultaneous disclosure, the TAC aims to enhance connectivity and comparability between financial and sustainability-related reporting. This adjustment underscores the importance of integrated reporting for effective stakeholder communication.
To ease the transition, the TAC proposed extending the phased implementation for broader sustainability-related risks and opportunities by an additional year. This adjustment allows companies to prioritise climate-related reporting during the initial years, reflecting the relative novelty of comprehensive sustainability disclosures.
Beyond these technical considerations, the TAC highlighted the importance of aligning the ISSB standards with European Sustainability Reporting Standards (ESRS) to address interoperability concerns for companies operating across UK and EU jurisdictions.
Collaboration between UK and EU standard-setters will be essential to reduce complexity and support seamless reporting practices. These regulatory developments underscore the growing intricacy of sustainability reporting.
At Luminous, we’re poised to help our clients navigate these changes with clarity and confidence. Whether it’s aligning with new standards or crafting impactful sustainability narratives, our expertise ensures that our clients are well prepared to lead in this dynamic landscape.
As the UK Government evaluates these recommendations and moves closer to implementing the UK Sustainability Reporting Standards (UK SRS), Luminous remains at the forefront of supporting clients through every step of this journey. If you are interested in hearing about Luminous’ ISSB kick-start programme, please get in touch.
Together, we’ll transform challenges into opportunities for impactful reporting and communication.
