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UK ESG Reporting Requirements in 2024

by Sam Baldwin

2 July 2024

What your business needs to know about the UK’s ESG reporting requirements in 2024 to align with ESG regulations effectively.

In an era where transparency and accountability are paramount, the United Kingdom is continuing to establish a robust framework for ESG reporting requirements. These regulations are designed to ensure that organisations comply with legal standards. Additionally, they ensure organisations embrace the ethos of sustainability and environmental responsibility.

 

UK-specific ESG reporting requirements

Keeping up with the latest developments in UK sustainability regulations can be challenging. To help you stay informed, we have prepared a breakdown of some of the key ESG report requirements specific to the UK that you should be aware of.

 

Sector-Specific ESG Reporting Obligations

Industries with significant environmental footprints, such as energy, manufacturing, and transportation, are subject to bespoke ESG reporting obligations. These sector-specific requirements require companies to report on environmental, social, and governance aspects, thereby mitigating risks and maintaining industry standards.

 

Streamlined Energy and Carbon Reporting (SECR)

The SECR framework requires large UK entities to disclose specific information within their annual financial reports. This includes data on energy usage, carbon emissions, and greenhouse gas (GHG) emissions, promoting a mindset of environmental consciousness and operational transparency.

 

Financial Conduct Authority TCFD Reporting (FCA TCFD)

The UK Financial Conduct Authority has introduced TCFD reporting for UK’s largest publicly traded companies, banks and insurers, as well as private companies with over 500 employees and £500 million in turnover. Importantly, the Task Force on Climate-related Financial Disclosures is a global initiative and provides an overview of the company’s effort to implement climate-related recommendations, the role of the Board and Management in assessing and managing climate-related risks and opportunities, and their dedicated climate governance framework.

 

Climate-Related Financial Disclosure (CRFD)

The UK government Department for Energy Security and Net-Zero has set a requirement for most large UK companies with 500 employees and a £500 million turnover to report annual climate-related risk disclosure. Consequently, the disclosure is aligned with the Task Force on Climate-related Financial Disclosures. The disclosures should be made as part of their SECR reporting or as part of their non-financial and sustainability statement with the company’s Strategic Report, in their annual financial statements.

 

UK Sustainability Reporting Standards (SRS)

The UK government has made significant progress in introducing the UK Sustainability Reporting Standards (UK SRS). These standards align with a global baseline of the IFRS Sustainability Disclosure Standards. The inaugural standards are IFRS S1 and IFRS S2. IFRS S1 addresses general sustainability-related financial disclosures. IFRS S2 focuses on climate-related disclosures. The UK’s endorsement is expected by the first quarter of 2025. Once endorsed, these standards will become an integral part of the Sustainability Disclosure Reporting framework.

 

Energy Savings Opportunity Scheme (ESOS)

The ESOS is a mandatory energy assessment scheme to be completed and submitted to the UK government every 4 years. The assessment is mandatory for large companies who either have over 250 employees or £44m turnover and £38m gross assets. However, if one company in the UK qualifies, the whole group must adhere, regardless of size.

 

Expert ESG Reporting Every Step of the Way

As the UK continues to refine its ESG reporting requirements, it’s advisable for organisations to stay updated with these changes. Conforming to these regulations is not just about legal compliance; it also reflects a commitment to sustainable practices and corporate responsibility.

This article serves as an overview of the ESG reporting obligations in the UK. For further insights or guidance, feel free to reach out to our ESG specialists or learn more about how we can help – we’re here to share our knowledge. Good luck with your ESG reporting journey!

Source: Tue, 02 Jul 2024 12:37:27 +0100

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