"The FCA's announcement marks an important milestone in the UK's transition towards IFRS-based sustainability reporting. By introducing UK Sustainability Reporting Standards through a mandatory 'comply or explain' regime, the UK joins a growing number of jurisdictions implementing ISSB-based reporting requirements while reflecting domestic market circumstances.

"High-quality sustainability information supports investor confidence, better decision-making and efficient capital allocation. The new requirements will help improve sustainability-related information available to the market.

"Whether a company complies with the standards or explains why a disclosure has not been provided, it will need clear governance, sound processes and evidence to support its decision, helping mainstream sustainability reporting to be on apar with Financial Reporting.

"For businesses, the focus should be on understanding how sustainability-related risks and opportunities may affect its resilience, competitiveness and value creation over the short, medium and long term, and ensure they are well prepared for the new requirements.

"We welcome the FCA's consultation on guidance supporting the application of the 'comply or explain' framework and encourage stakeholders to engage with that process. The FCA consultation comes to an end on 28 October 2026.

"The FCA's decision to promote transparency around sustainability assurance arrangements is also encouraging. Greater clarity on whether assurance has been obtained, together with disclosure of the provider, scope, level and standards applied, will provide useful information to investors. However, work will be needed to work towards a proportionate and balanced mandatory UK sustainability assurance regime that reinforces trust while remaining practical and scalable for businesses.

"ICAEW continues to support UK members and businesses, supporting practical implementation of UK SRS, and the associated assurance of that information."

ENDS