FRC sets out recommendations for the sustainability assurance market

Purpose

The FRC has issued a report recommending three key actions to support the development of the UK’s sustainability assurance market. The primary objective is to establish a clear policy framework, unify regulatory regimes, and improve information on sustainability assurance quality.

The establishment of a clear UK policy framework aims to provide medium-term certainty for providers and reporters, supporting investment and aligning with international frameworks where appropriate. This will enable companies to make informed decisions about their sustainability practices and facilitate investment in the market.

Effects on Industry

The report’s recommendations have significant implications for various industries, including businesses, investors, and providers of sustainability assurance services. The unified regulatory regime is expected to maximize certainty for companies, providers, and investors, leading to increased confidence in the market.

The improved quality of information on sustainability assurance will support how the assurance market functions, enabling stakeholders to make more informed decisions. This, in turn, may lead to increased investment in sustainable practices and a more robust market for sustainability assurance services.

Relevant Stakeholders

This report affects various stakeholders, including:

• Businesses: Companies operating in the UK will be impacted by the establishment of a clear policy framework and unified regulatory regime.
• Investors: The improved quality of information on sustainability assurance will enable investors to make more informed decisions about investing in companies with robust sustainability practices.
• Providers of Sustainability Assurance Services: The report’s recommendations may lead to increased demand for high-quality sustainability assurance services, creating new opportunities for providers.

Next Steps

To comply with the report’s recommendations, relevant stakeholders should take the following actions:

• Businesses: Review and update their sustainability practices in line with the recommended policy framework.
• Investors: Consider investing in companies with robust sustainability practices, supported by high-quality sustainability assurance services.
• Providers of Sustainability Assurance Services: Develop and provide high-quality sustainability assurance services to meet the increased demand driven by the report’s recommendations.

Any Other Relevant Information

The FRC’s Executive Director of Regulatory Standards, Mark Babington, emphasized the importance of implementing the report’s recommendations. He noted that a clear policy framework, unified regulatory regime, and improved information on sustainability assurance quality are essential for maximizing certainty in the market.

The report provides a comprehensive analysis of the UK’s sustainability assurance market and offers practical recommendations for its development. By following these recommendations, stakeholders can contribute to creating a more robust and sustainable market for companies, investors, and providers of sustainability assurance services.