Sustainability reporting enables organisations to demonstrate their impact on the economy, environment, and people. However, the landscape is rapidly evolving, with regulatory changes in multiple jurisdictions.
Through the identification of material topics and related performance measurements, an organisation can align its vision and strategic ambition to stakeholder expectations and report accordingly.
With greater insight into relevant ESG information, businesses can effectively manage risks, unlock opportunities, and identify areas for value creation not only for the organisation but also for the wider society.
We can work with your business to identify which regulations you are required to report against now, and others that may be on the horizon.
Despite compliance often being the initial driver for reporting, the value comes from identifying risks and opportunities and gaining an invaluable alternative insight into your organisation.
Prior to embarking on data collection or drafting, you must first respond to the concept of double materiality, the cornerstone of best practice reporting. Identifying which topics are most material for your organisation from an impact perspective, actual or potential impacts on people or the environment, and from a financial perspective, how sustainable factors affect the value of your organisation, allows you to ascertain which topics you must report on, and align your strategy towards these.
Through undertaking a robust materiality assessment, and engaging with stakeholders throughout your value chain, an organisation can gain an understanding of areas requiring risk mitigation, opportunities for value creation, have open and transparent stakeholder engagement, and align your ESG strategy towards supporting and strengthening your overarching business strategy.
Our expert teams can assist your organisation with:
determining which reporting standards you must, or should, report against,
double or single materiality assessment,
regulatory gap analysis,
data collection and the narration required to create a comprehensive and transparent report that satisfies stakeholder needs,
external assurance for fully compliant reports and preparation for the assurance process ahead of time.
At Mazars, we are at the heart of the debate on non-financial reporting both in the UK and worldwide, leading or representing on various councils, committees and working groups. Please see below some of our thought leadership and comments on today’s reporting and compliance initiatives and standards.
IFRS S1 & S2
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.
The Corporate Sustainability Reporting Directive (CSRD)
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:
Task Force on Climate-Related Financial Disclosures (TCFD)
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)
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:
large unquoted companies
large Limited Liability Partnerships (LLPs)
Global Reporting Initiative (GRI)
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.
United Nations Global Compact (UNGC)
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.
Get in touch
To discuss your sustainability reporting requirements, please contact us using the details below.
The climate-related financial disclosures landscape is changing, since the UK government has amended the Companies Act 2006 to introduce additional requirements for TCFD-aligned climate-related disclosures in the annual reports of a significant mainstream of companies.
On January 5, 2023, the Corporate Sustainability Reporting Directive (CSRD) entered into force after several months of political negotiations, achieving a significant step forward in regulating sustainability reporting within the European Union (EU).