LONDON--(BUSINESS WIRE)--A recent study conducted by The Institute of Chartered Accountants of Scotland (ICAS) has revealed a strong demand among UK business leaders for government financial support and mandated sustainability reporting standards to propel corporate sustainability practices. The research, which collected responses from 581 ICAS Chief Executives, Managing Directors, Chief Financial Officers, and Financial Directors across the UK, indicates a growing desire for concrete actions from the UK Government to prioritise sustainability across the corporate sector. These findings are particularly prescient in light of the two recent standards published by the International Sustainability Standards Board (ISSB), which will help establish a global baseline for sustainability disclosures.
According to the findings, 36% of UK business leaders are calling for the implementation of mandated sustainability reporting standards. The study also highlights that 28% of participants advocate for unified sustainability standards, emphasising the importance of interoperability among the various reporting frameworks in existence and currently being developed worldwide.
Additionally, 49% of the participants believe that government grants and tax incentives would significantly aid their efforts to prioritise sustainability reporting.
On the type of information businesses should report on, 45% of respondents argue for a double materiality approach. This approach involves reporting on both the environmental and societal impact of the business for the benefit of multiple stakeholders, as well as the influence of sustainability matters that are financially material and influence value creation for investors. Something that ICAS believes is lacking from the ISSB’s standards.
The study also reveals that 42% of UK business leaders are seeking government incentives to support the upskilling of employees in sustainability and to strengthen the talent pipeline. This suggests the need for focused efforts to develop the necessary skills and expertise in sustainability.
Bruce J Cartwright CA, CEO of ICAS, commented on the research, stating, "The research shows clearly that UK businesses need the support of policy makers to ensure that sustainability reporting is prioritised. Short-term investor pressure and a lack of skills and talent to be able to report on sustainability means that the UK is at a real risk of falling behind our international and European counterparts in implementing Environmental, Social and Governance (ESG) policies and addressing climate change. There will be an increasing requirement on companies to effectively report on sustainability activities and achievements, so the talent and skills must be in place to do this. Sustainability reporting needs to be on par with the level of detail and scrutiny given to financial reporting. But without the mandate from government, it is hard to see how this will happen.”
Looking ahead, the study highlights key areas of focus for any incoming UK government, if there is a General Election next year. According to UK business leaders, 50% believe the government should concentrate on providing tax incentives or bonuses for companies that implement net zero targets. Additionally, 42% of respondents called for incentives and business support to aid companies in implementing sustainability reporting.
The survey follows the inaugural ICAS sustainability reporting summit, held in London in April 2023, which assembled an expert line up of keynote speakers and panellists, including standard setters, regulators, government, corporates, non-government organisations (NGOs) and industry. The event highlighted insightful exchanges about the most meaningful and effective direction of travel in the reporting sphere, which were summarised in a recent CA magazine article. ICAS has been a critical partner in the development of international sustainability reporting standards and has called, via public platforms and letters to government, for aligned, mandatory standards which report on a wide, holistic set of measures.
The full survey can be accessed here.