ACCA welcomes the opportunity to respond to the consultation from the Department for Business and Trade (DBT) on developing an oversight regime for the assurance of sustainability-related financial disclosures. The proposed regime supports the core objectives of the UK Modern Industrial Strategy and wider government priorities, including promoting long-term economic growth, increasing investment, and strengthening the UK’s position as a global hub for financial and professional services. The regime should enhance the quality, consistency, and credibility of sustainability disclosures which will improve investor access to reliable, decision-useful information. This is essential for mobilising private capital toward productive, innovative, and sustainable sectors, and for enhancing the UK’s ability to attract a greater share of internationally mobile investment.
We appreciate the Financial Reporting Council’s (FRC) work to date and its considered approach to establishing a competitive and high-quality sustainability assurance market and we commend the DBT for seeking stakeholder input at this important stage.
We believe that the UK is well positioned to influence the sustainability assurance agenda both domestically and globally, building on its strong corporate governance framework.
In developing the regime and adopting sustainability assurance standards it is important to ensure international interoperability to support cross-border consistency and market confidence.
Progress on sustainability assurance must go hand in hand with the development of sustainability disclosures. We therefore welcome the recent release of the consultation on the UK Sustainability Reporting Standards (UK SRS S1 and S2), as well as the latest consultation on ISSA (UK) 5000 issued by the FRC. We agree that these consultations represent the first step in developing a UK sustainability reporting framework that is fit for the long term.
We support the Government’s vision for ARGA to act as an ‘improvement’ regulator, supporting assurance providers in their efforts to grow. This is important given the nascent nature of the market and the ambitions of the UK’s Industrial Strategy for growth of the financial services sector. ARGA can play a key role in bringing assurance providers together and sharing leading market practice. This will help the market to evolve.
In establishing ARGA and as the sustainability assurance market develops, proportionality is key. An approach and standards that are scalable and risk-based will help avoid unintended barriers to entry for smaller or emerging firms, encouraging a diverse, dynamic and competitive market capable of serving a variety of clients.
