IFRS Sustainability Disclosure Standards, issued by the International Sustainability Standards Board (ISSB), has been currently adopted by 40 jurisdictions worldwide.

Despite geopolitical uncertainties, additional jurisdictions, including the UK, are expected to adopt IFRS Sustainability Disclosure Standards or use other ISSB standards.

The UK’s new Sustainability Reporting Standards (UK SRS) will apply to large listed entities, with value chain implications, and are designed to be aligned with ISSB, with minimal edits, ensuring global comparability and consistency.

This is a major change management exercise, says Ravi Abeywardana, Director of Sustainability, Reporting and Assurance at ICAEW: “Governments worldwide are mainstreaming sustainability reporting and assurance to bring it on par with financial reporting, because capital markets need the information.

For example, businesses will need to report on climate-related financial disclosures, metrics, and targets, and have their information assured. While UK SRS will likely start as voluntary, it is strongly recommended that organisations begin preparing now.”

UK SRS sticks closely to ISSB standards

The UK SRS will be based on ISSB standards with minimal adjustments, helping UK businesses communicate risks and opportunities to global investors. These standards aim to drive transparency, comparability, and verifiability, while connecting sustainability reporting with financial statements.

In the UK, mandatory application of UK SRS of UK listed entities will most likely be after a consultation in 2026, so early preparation is key.

The information disclosed via UK SRS will likely be assured under the International Standard on Sustainability Assurance (UK) 5000, the UK adaptation of the global benchmark developed by the International Auditing and Assurance Standards Board (IAASB). The level of assurance required on UK SRS disclosures will be determined but will likely to be voluntary to begin with.

Start preparing now

Abeywardana emphasises that during a period of geopolitical and economic uncertainty, companies should return to business fundamentals and resilience:

“If you’re not yet in a jurisdiction with mandatory sustainability reporting, now is the perfect time to understand the requirements from the ISSB. These standards support disclosures about business fundamentals and resilience, rather than a tick box exercise to disclosures.”

Reporting should reflect a company's integrated strategy and risk management rather than siloed processes. “If you haven’t already, start embedding sustainability matters into financial operations now to improve value creation and deliver decision-useful information to investors.”

Accountants have the skills

Accountants should view sustainability reporting as an opportunity, not as a compliance burden. The close alignment between sustainability reporting and assurance with financial reporting and assurance mean the profession can leverage existing skills.

“Understand your jurisdiction’s requirements, or international sustainability reporting and assurance standards if there aren’t any, implement a change management process, and help level up sustainability reporting to match financial reporting,” advises Abeywardana. “It may feel like a tidal wave, but it’s a huge opportunity for the profession.”

Strong sustainability performance can unlock capital

Transparent disclosures and proactive engagement with investors can unlock new sources of capital. In today’s dynamic, rapidly changing environment, marked by geopolitical and economic uncertainty, companies that excel in overlaying sustainability matters with business fundamentals will stand out.

Clearly communicating risks, outlining adaptation and mitigation strategies, and identifying sustainability-related opportunities can help organisations position themselves as more attractive to lenders and investors.

“Sustainability reporting can provide some fantastic opportunities to articulate a company's business fundamentals, and it's important for companies to pivot their thinking to reflect this,” Abeywardana says. “International standard setters are mainstreaming sustainability reporting to the same level as financial reporting.”