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The Institute of Chartered Accountants of Scotland (ICAS) has called for the government’s sustainable finance framework to be strengthened, adding that proposed reporting standards must “go further”.
It comes as the government closed consultations this week on draft measures covering sustainability reporting standards, oversight of sustainability assurance, and requirements for climate-related transition plans.
ICAS gathered member views through a survey and a workshop with officials from the Department for Business and Trade, the Department for Energy Security and Net Zero before submitting its response.
Fiona Donnelly, director of sustainability at ICAS, said the profession backed the ambition for the UK to “lead globally on sustainable finance” but urged policymakers to balance comparability with flexibility.
She said: “We have called for a clear, consistent and proportionate reporting regime that delivers meaningful information for all users, reduces unnecessary regulatory burdens, and has uniform application criteria across the market.”
ICAS said the draft UK Sustainability Reporting Standards, based on rules issued by the International Sustainability Standards Board, should be expanded to cover the wider environmental and social impacts of companies.
The principle, already adopted in Europe, requires businesses to report both on how sustainability issues affect them and how they affect society and the environment.
On regulation of assurance providers, ICAS supported giving the new Audit, Reporting and Governance Authority powers to register and oversee practitioners but questioned delays until the body was fully established.
Donnelly said the Financial Reporting Council could begin developing a register in the meantime.
She added that while the institute supported a “profession-agnostic” approach to assurance, all providers should meet clear criteria on expertise, quality and ethics. She also suggested that assurance of sustainability disclosures should become mandatory for some public interest companies once the market matures.
In relation to transition plan rules, the institute backed mandatory disclosure but recommended a three-to-five-year lead time to allow businesses to prepare. Donnelly said transition plans should be updated every three years, linked to company strategy, and progress reported annually. However, she warned against requiring companies to implement plans in full, saying this could discourage ambitious commitments.
She added that the scope of the rules should be widened to cover high-emitting companies and aligned with the sustainability reporting standards to avoid duplication.
The government is expected to set out its policy direction later this year following the consultation process. ICAS said it would continue to engage with departments and stakeholders as the framework develops.
