Two independent statutory panels have stated their opposition to the UK Financial Conduct Authority’s (FCA) proposals for introducing mandatory reporting under the ISSB-aligned UK Sustainability Reporting Standards (UK SRS).
Last month, the FCA consulted on a proposed update to its listing rules, which would require commercial companies listed on the Main Market to disclose climate-related information in line with UK SRS S1 from the start of next year.
The FCA Listing Authority Advisory Panel and the FCA Market Practitioner Panel have published a joint response to this proposal. The advisory bodies stated their opposition to the scope of the reporting requirements, citing the uplift required for companies, the implications for competitiveness and the lack of a cost-benefit analysis.
“This proposal is not, in our view, proportionate and does not reflect the material uplift UK SRS represents relative to current UK climate reporting requirements,” the statement reads. “Our suggested alternative approach would be to make UK SRS available on an equivalence basis, allowing voluntary adoption to meet existing TCFD aligned requirements.”
It continues: “Following a period of voluntary adoption, the FCA could assess voluntary uptake and market feedback and, subject to evidence of net benefits, consider a comply or explain or mandatory approach with appropriate size thresholds and timescales.”