UK and China need aligned sustainability reporting, says ACCA

The UK and China could improve cross-border investment by strengthening the coherence and credibility of sustainability reporting, according to recent report findings from the Association of Chartered Certified Accountants (ACCA). 

The global accountancy body’s findings suggest that regulators and policymakers could accelerate the development of assurance by setting realistic expectations and adopting a phased implementation. 

Adopting a transparent roadmap with defined milestones would allow organisations to plan and build capacity while reducing uncertainty and costs, according to ACCA. Regulators could further support corporate uptake by providing clear guidance and promoting the use of digital tools.

The report identifies several challenges, including a lack of skills to analyse data and the large volume of sustainability matters to consider. It also highlights the difficulty in connecting sustainability and financial data.

Both the UK and China currently support the work of the International Sustainability Standards Board (ISSB). Both nations use the International Auditing and Assurance Standard Board ISSA 5000 as a basis for their sustainability assurance standards.

The report, which compares how the two countries approach disclosures, urges as little divergence from international standards as possible. It suggests the assurance market should operate under the supervision of an oversight body to enhance trust.

Joe Fitzsimons, regional lead of policy and insights at ACCA, said: “The work underlines how the UK and China share the same challenges in the development and implementation of sustainability disclosure and assurance standards. 

“We are at a critical juncture globally with sustainability reporting and assurance and we hope this report will make a significant contribution in helping both countries to find the right road.”

Helen Brand, chief executive of ACCA, added: “Regulators and policymakers can strengthen corporate uptake by providing clear guidance, support with practical implementation and promoting the use of digital tools. By setting out a transparent roadmap with defined milestones organisations could plan, align and build capacity while reducing uncertainty and cost.

“Assurance providers would be helped by regulators providing clear terminology, expectations and scope in order to build confidence in the market. The report says the assurance market should operate under the supervision of an appropriate oversight body to enhance credibility and trust.”