The Association of Chartered Certified Accountants (ACCA) has urged the Financial Conduct Authority (FCA) to adopt a phased approach as the UK advances toward stricter sustainability reporting aligned with global standards. The recommendation comes amid ongoing consultations to upgrade disclosure requirements for listed companies.

At the core of the transition is the UK’s move to implement Sustainability Reporting Standards (SRS 1 and SRS 2), which significantly expand the scope of disclosures beyond the earlier Task Force on Climate-related Financial Disclosures framework. These new standards are aligned with international benchmarks, aiming to improve transparency, comparability, and decision-useful data for investors.

However, ACCA highlighted that the increased depth and complexity of reporting will require companies to enhance data systems, governance structures, and internal capabilities—particularly for smaller or less mature organizations.

To address these challenges, ACCA recommends a pragmatic and proportionate implementation strategy, including transitional reliefs, phased adoption timelines, and regular assessments of market readiness. This approach is intended to balance investor demand for high-quality ESG disclosures with the operational realities faced by businesses.

The FCA’s proposed shift also reflects a broader global trend toward harmonized sustainability reporting, with the UK aligning its framework closely with international standards. While this strengthens the country’s position in global ESG reporting, ensuring effective execution will be critical to maintaining reporting quality and market confidence.

Overall, the development signals a pivotal step in the UK’s sustainability reporting evolution—moving from climate-focused disclosures to a more comprehensive, globally aligned ESG reporting ecosystem.