UKEB ISSB ED Webinar Slides

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UKEB 30 June 2022

The views expressed in this presentation are those of the presenters and not necessarily those of any organisation, nor are they necessarily reflective of any official government policy or position.

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Contents

1. Welcome

First Audience Poll

Please let us know which stakeholder group you represent:

  1. users of accounts
  2. preparers of accounts
  3. accounting firms
  4. regulators and standard setters
  5. academics
  6. none of the above

Online poll results showing stakeholder representation: preparers of accounts (33%), accounting firms (26%), regulators (13%), users (5%), and academics (4%).

2. Regulatory Overview

UK Endorsement Board: Influencing functions

IFRS Accounting Standards

A diagram illustrating the flow: UK stakeholders → UKEB → IASB, representing the endorsement and adoption process.

IFRS Sustainability Disclosure Standards

A diagram illustrating the flow: UK stakeholders → UKEB → IASB and ISSB, representing the endorsement and adoption process.

The UKEB is responsible for endorsement and adoption of IFRS accounting standards for use in the UK

BEIS has requested that the UKEB consider the overlap of the proposed ISSB sustainability disclosure standards with those issued by the IASB.

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Cross government views

Headshot of a smiling woman with blonde hair and blue eyes, framed in a circle. BEIS Debbie Crawshawe Accounting Expert

Headshot of a man with glasses, a beard, and short hair, wearing a suit and blue shirt with a striped tie. FCA Mark Manning ESG and Policy Lead

Headshot of a smiling woman with short blonde hair and light makeup. UKEB Seema Jamil-O'Neill Technical Director

Headshot of a woman with long dark hair, wearing a dark top and a light, patterned scarf. FRC Sarah-Jayne Dominic Policy, Programmes & Strategy

BEIS: SDR Regime

  • SDR will create a flow of sustainability-related information from corporates through the financial system, enabling more efficient capital allocation and reducing greenwashing.

Greening Finance: A Roadmap to Sustainable Investing

Publication cover with the title, date (October 2021), and "HM Government" logo, representing a roadmap to sustainable investing.

  • For corporates, SDR consists of two main elements
    • Green Taxonomy
    • International Sustainability Standards
  • BEIS will be consulting later this year

FCA: Transparency along the value chain...

TCFD Financial Disclosures and FCA Document:

A document cover for "Proposals to enhance climate-related disclosures by listed issuers and clarification of existing disclosure obligations" (Policy Statement PS20/17, December 2020), featuring the TCFD and FCA logos.

"Better corporate disclosures will help inform market pricing and support business, risk and capital allocation decisions..."

IFRS Sustainability Exposure Draft:

A document cover for "Exposure Draft IFRS® Sustainability Disclosure Standard" ([Draft] IFRS S2 Climate-related Disclosures, March 2022), with comments due by 29 July 2022.

"...once the ISSB's future standards are endorsed for use in the UK, we expect, subject to consultation, that both the Companies Act and Listing Rules will reference the endorsed international standards directly”

"... the appropriate time to consult on introducing mandatory climate-related disclosure requirements will be alongside proposals to adapt our rules to reference a UK-endorsed ISSB standard in our framework instead of the TCFD's recommendations"

"The proposals... build upon the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD)..."

"IOSCO sees urgent need for global consistent, comparable and reliable sustainability disclosure standards”

IOSCO welcomes the publication of the ISSB's two proposed IFRS Sustainability Disclosure Standards. We will review the proposals, with the objective to endorse them for use by our member jurisdictions.

"Independent assurance is a cornerstone to building trust in the information that underpins capital markets"

Endorsement by IOSCO can pave the way for adoption of the Standards around the world, delivering much-needed consistency and comparability in sustainability-related information to the capital markets

Ashley Alder, Chair of the IOSCO Board, March 2022

Report on Sustainability-related Issuer Disclosures

A document cover for the "Report on Sustainability-related Issuer Disclosures, Final Report" by OICU-IOSCO.

UKEB - Draft Comment Letter: areas for consideration

Topics Areas for further consideration?
Definition / boundaries Should the term 'sustainability' be defined? Are the boundaries clear enough?
Global baseline Must be ambitious but also must be achievable for all.
Business model Is this prominent enough for users?
Materiality v Significant Is two better than one?
Connectivity Recognition, measurement and timeframes differ from accounting
Pace of change Legislative pace, phasing and proportional considerations

Second Audience Poll

Where do you see the biggest challenges with the exposure drafts?

  1. Definitions, boundaries and global baseline
  2. Materiality
  3. Connectivity with financial statements
  4. Pace of change and implementation
  5. Other

Screenshot of a live poll showing challenges with exposure drafts, including definitions (38%), materiality (10%), connectivity (21%), pace of change (25%), and other (6%) based on 80 responses.

FRC: Sustainability reporting ecosystem

Process flow diagram illustrating stages of reporting, audit, distribution, consumption, supervision, and regulation, involving various stakeholders and existing UK reporting requirements.

Existing UK reporting requirements examples:

  • Strategic Report inc. NFSIS and TCFD reporting, and S172 statement
  • Corporate Governance Report
  • Directors' Report (SECR)
  • Modern Slavery statement
  • Gender pay gap reporting

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3. Panel Discussion

Panel Moderator

Headshot of a woman with short light brown hair, wearing earrings and a necklace, smiling gently. Jane Fuller Visiting Professor at City, University of London, Fellow CFA UK

Headshot of a man with short hair and glasses, wearing a dark suit and a red tie, smiling. FCA Mark Manning ESG and Policy Lead

Headshot of a woman with long dark hair and a light patterned scarf, looking at the camera. UKEB Seema Jamil-O'Neill Technical Director, Chair

Headshot of a smiling young woman with long dark brown hair, wearing a white blouse with black trim. ISSB Lois Guthrie Senior Technical Advisor

Headshot of a smiling woman with short curly blonde hair, wearing a light jacket over a dark top. ICGN Christine Chow Board member

Headshot of a woman with short dark hair, wearing a white shirt and dark jacket, smiling slightly. Federated Hermes Louise Dudley Portfolio Manager

Headshot of a man with short grey hair, beard, and glasses, wearing a blue shirt and striped tie. Barclays Bank Gerbrand Muller Head of Finance for Sustainability and ESG

Headshot of a woman with medium-length blonde hair, smiling slightly, wearing a dark blazer. United Utilities Sabrina Curry Investor Relations

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4. Q&A from the audience

Questions submitted at event registration

We received 30 'burning questions' from attendees upon registering for the event.

A diagram illustrating "Questions submitted at event registration" grouped around three core areas:

Implementation: * Due process v speed of delivery * Timeline * Companies in scope * Transition relief * UK endorsement process (4)

Global baseline

Scope: * Achieving jurisdictional alignment (4) * UK subsidiaries of foreign entities * Are SASB standards mandatory or guidance? * Disclosure of all significant sustainability risks and opportunities?

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5. Wrap Up

Wrap Up and Next steps

An icon depicting a conference table with chairs, representing a meeting.

Presentation of final comment letter to the 18 July public UKEB Board meeting for review and approval

An icon depicting a laptop with a globe on the screen, representing online submission or publication.

Submission of the final letter to the ISSB by 29 July and publication on UKEB website

UK Endorsement Board: how to get involved

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Sign up for subscriber alerts at [email protected]

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Email to express your interest in outreach on a particular project at [email protected]

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Follow projects and developments on the UKEB website www.endorsement-board.uk

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Follow us on LinkedIn

Thank You

UK Endorsement Board 1 Victoria Street | London | SW1H 0ET https://www.endorsement-board.uk/ [email protected]