UK carbon reporting legislation needs international standards that work cooperatively to enable companies to report successfully
In response to the UK government’s consultation on Scope 3 emissions reporting, leading global accountancy body ACCA (the Association of Chartered Certified Accountants) has reiterated its call for support in driving the maximum level of cooperation between international and regional sustainability reporting.
A global baseline is vital for the consistent and comparable reporting of greenhouse gases. However, regions and countries around the world will have differing public policy objectives, which may drive different reporting requirements.
According to ACCA, organisations should be given clear and consistent guidance to support them to collect and analyse Scope 3 data, to reduce the risk of exposure to undue cost and effort.
In a response to the UK government’s consultation, looking at the costs, benefits and practicalities of reporting, ACCA is clear in its stance that the responsibility for making materiality judgements and determinations rests with the reporting entity.
This is a challenge that should not be underestimated. Complying with the IFRS sustainability standards requires significant judgement, especially when the boundaries between ‘climate-related’ topics and other topics (i.e. water, biodiversity, social matters) can be blurred.
ACCA has highlighted that the greatest challenge for organisations is in data collection and the quality of that data. ACCA also believes the benefits accrued from this reporting for stakeholders outweigh the additional burden that is undoubtedly imposed in business.
The Streamlined Energy and Carbon Reporting Regulation (SECR) – the UK’s carbon reporting legislation – is a valuable tool for promoting corporate sustainability, however, it is urging the government to ensure that the burden is not too heavy on small and medium sized businesses (SMEs).
ACCA has recommended a phased roll out of SECR for SMEs and that the government needs to ensure that SECR is aligned to the ISSB standards. It is also important that there are reasonable penalties for non-compliance.
Jessica Bingham, Policy and Insights Lead, (EEMA & UK), ACCA, said: “The SECR regulations in many ways achieve their original objectives and assist in a smoother transition to future sustainability related reporting. ‘We believe that the regulations have increased awareness of climate change and encouraged businesses to take action to reduce their emissions. They have also provided valuable information to investors and other stakeholders about the environmental performance of businesses.’
About ACCA
We are ACCA (the Association of Chartered Certified Accountants), a globally recognised professional accountancy body providing qualifications and advancing standards in accountancy worldwide.
Founded in 1904 to widen access to the accountancy profession, we’ve long championed inclusion and today proudly support a diverse community of over 247,000 members and 526,000 future members in 181 countries.
Our forward-looking qualifications, continuous learning and insights are respected and valued by employers in every sector. They equip individuals with the business and finance expertise and ethical judgment to create, protect, and report the sustainable value delivered by organisations and economies.
Guided by our purpose and values, our vision is to develop the accountancy profession the world needs. Partnering with policymakers, standard setters, the donor community, educators and other accountancy bodies, we’re strengthening and building a profession that drives a sustainable future for all.
Find out more at: www.accaglobal.com