Sustainability reporting2

The International Sustainability Standards Board (‘ISSB’) issued its inaugural standards, IFRS S1 – General Requirements for Disclosure of Sustainability-related Financial Information, and IFRS S2 - Climate-related Disclosures, in June 2023. The aim of these standards is to create a common language for organisations to disclose the effects of climate-related risks and opportunities.

The standards will be effective for annual reporting periods beginning on or after 1 January 2024, and may be applied in preparing and reporting sustainability-related financial disclosures. The standards follow a similar structure to the Taskforce on Climate-related Financial Disclosures (TCFD) with entities required to provide disclosures on governance, strategy, risk management and, metrics and targets.

Read what companies can learn from IFRS S1 and IFRS S2.

The EU is introducing regulations to bring sustainability reporting in line with financial reporting. The Corporate Sustainability Reporting Directive (CSRD) will require companies to report on how sustainability issues impact their business, and how their operations impact people and the planet i.e. the concept of Double Materiality. Application of the CSRD will occur progressively, starting from the 2024 financial year. For further information on when your organisation may be affected, please get in touch, or refer to our Guides below:

• Mazars Preparing for the CSRD
• Mazars ESRS guide
• Guide to the EU Corporate Sustainability Reporting Directive CSRD

Mazars developed the UNGP Reporting Framework and Assurance Guidance in collaboration with Shift and is therefore well placed to guide your company through human rights reporting aligned to the framework. Find out more.

The Task Force on Climate-Related Financial Disclosures (TCFD) is a reporting framework centred around four key areas: governance, strategy, risk management, and metrics and targets. As of fiscal year 2022, the UK Government has considerably expanded the pool of companies falling in scope for mandatory TCFD disclosures, bringing climate-related risk into the annual report for a significant mainstream of companies. Find out more.

Streamlined Energy and Carbon Reporting (SECR) was introduced in 2018, with the intention of:

• increasing awareness of energy costs;
• creating a level playing field amongst large organisations;
• ensuring administrative burdens associated with energy use and emissions reporting are proportionate and broadly aligned with existing energy reporting requirements;
• providing organisations with the right data to adopt effective energy efficiency measures and take opportunities to reduce their impact on the environment; and
• providing greater transparency for investors, and other stakeholders, on business energy efficiency and low carbon readiness.

As of 2019, the following companies are in scope for Streamlined Energy and Carbon Reporting:

• quoted companies
• large unquoted companies
• large Limited Liability Partnerships (LLPs)

The Global Reporting Initiative (GRI) standards, issued by the Global Sustainability Standards Board (GSSB), are the world’s most widely adopted voluntary reporting standards. Following the GRI’s modular structure, an organisation can credibly report on its management of material topics, both positive and negative impacts, and include forward-looking goals and targets. The GRI creates a global common language for organisations to report on these points, enabling more informed dialogue and decision making.

The United Nations Global Compact (UNGC) is a principle-based framework for businesses, covering 10 distinct principles across the areas of human rights, labour, environment, and anti-corruption. The 10 principles of the UNGC are derived from internationally recognised declarations such as the Universal Declaration of Human Rights, and the International Labour Organisation’s Declaration on Fundamental Principles and Rights at Work. All members of the UNGC must submit an annual Communication on Progress.