This updates on the commitments in the 2023 Green Finance Strategy and includes an update on UK adoption of IFRS Sustainability Disclosure Standards, transition plan disclosures, progress on SDR and investment labels, plans for introducing a UK green taxonomy, and developments relating to nature-related disclosures.

IFRS Sustainability Disclosure Standards

The UK Government has outlined its aim to make UK-endorsed ISSB standards available in Q1 2025. These would be known as UK Sustainability Reporting Standards. Subject to a positive endorsement decision, the Financial Conduct Authority (FCA), as set out in its Primary Market Bulletin 49, will then consult on plans to introduce requirements for UK-listed companies to disclose sustainability-related information using UK Sustainability Reporting Standards.

The UK Government will consult separately on plans to introduce disclosure requirements against UK Sustainability Reporting Standards for those companies outside the scope of the FCA’s rules. It is anticipated that any changes arising from this consultation would be effective no earlier than accounting periods beginning on or after 1 January 2026.

Separate to the update, the Department for Business and Trade (DBT) has published a document which summarises the overall framework that has been established within the UK for assessing IFRS Sustainability Disclosure Standards and the terms of reference for the development of UK Sustainability Reporting Standards.

Transition Plan Disclosures

In light of the overlap between the ISSB’s IFRS S2 Climate-related Disclosures and the Transition Plan Taskforce (TPT) Disclosure Framework, the FCA’s planned consultation on implementing UK-endorsed ISSB standards will also consider strengthening its expectations for transition plan disclosures with reference to the TPT Disclosure Framework.  The UK Government is also planning to consult shortly on how the UK’s largest companies can most effectively disclose their transition plans.

SDR & Investment Labels

The FCA has finalised its SDR and investment labels regime for funds based in the UK, including measures for investment labels, naming and marketing rules, an anti-greenwashing rule for all FCA-authorised firms, and disclosure rules. The most recent update outlines how the FCA is currently consulting on plans to extend the SDR and labelling regime to portfolio managers based in the UK. The Government is also planning to consult in 2024 on whether to broaden the scope of SDR to include funds under the Overseas Funds Regime.

UK Green Taxonomy

The Government has reiterated plans to consult on a proposed UK Green Taxonomy in due course. It has noted that once finalised, there will be a period of testing for voluntary disclosures and use for at least two reporting years before exploring the possibility of mandating disclosures

Nature-Related Disclosures

Although the Government has not outlined any firm plans in relation to nature-related disclosures, it welcomed the work of the Taskforce on Nature-related Financial Disclosures (TNFD) and the ISSB’s commitment to research and develop future additional standards, which could include reporting on nature-related risks and opportunities.

The implementation update can be found on the government website here.  The DBT summary document is available on the DBT website.  The FCA's Primary Market Bulletin 49 is available on the FCA website.