Consultation: smarter regulation non-financial reporting review

The current non-financial reporting landscape in the UK has grown as a result of the demand for the provision of non-financial information from investors and other stakeholders seeking information to support more sophisticated decision making that is not focused solely on financial return. As a result, reporting is required for differing subjects, is not clearly connected, and may not provide companies, investors and wider stakeholders with the information they need to support in decision making.

Non-financial reporting is essential for resilience of the UK economy as business, society and the planet depend on each other. The way each organisation manages its key resources and relationships affects the value that it generates for economies, societies, and nature. Undertaking a non-financial reporting exercise enables increased awareness of how non-financial risks and opportunities will impact upon business, and the resilience of their strategy in the face of change.

Good quality non-financial reporting is also useful to demonstrate value drivers beyond financial performance. This includes intangibles not recognised on the balance sheet, such as innovative processes, know-how and corporate culture, which are fundamental for success, but not currently represented within a comparable framework.

ACCA therefore supports the UK

Government in their objectives to:

• Improve regulation across the board to reduce burdens and drive economic growth
• Increase transparency
• Support the board of directors in making policy decisions and shaping future strategy
• Develop a framework to support informed investment decisions
• Respond to the work of the International Sustainability Standards Board; and
• Develop a framework that supports the UK’s ambition to be the world’s first net-zero aligned financial centre

ACCA’s view is that non-financial reporting is key to attracting funds to the UK economy due to increased investment in and focus on green activities, from both an investor and a lender perspective, as investors and lenders seek to decarbonise and move toward more sustainable portfolios. We anticipate that the UK Government’s objectives will support inward investment to the UK.

To read the response in full, download the consultation document on this page.