(Credit: Canva Pro)A recent study conducted by The Institute of Chartered Accountants of Scotland (ICAS) revealed a demand among U.K. business leaders for government financial support and mandated sustainability reporting standards.
The research, based on responses from 581 ICAS chief executives, managing directors, chief financial officers, and financial directors across the United Kings, underscores the growing need for concrete actions from the government to prioritize sustainability practices in the corporate sector. These findings coincide with the recent establishment of global baseline sustainability disclosures by the International Sustainability Standards Board (ISSB).
The study indicates that 36% of U.K. business leaders are advocating for the implementation of mandated sustainability reporting standards. Additionally, 28% of respondents are calling for unified sustainability standards, emphasizing the importance of interoperability among the various reporting frameworks used worldwide.
Nearly half of the participants (49%) believe that government grants and tax incentives would significantly aid their efforts in prioritizing sustainability reporting. Such incentives could encourage more businesses to embrace and invest in sustainable practices.
Regarding the type of information businesses should report on, 45% of respondents support a double materiality approach. This entails reporting on both the environmental and societal impact of the business to benefit multiple stakeholders, along with addressing sustainability matters that financially influence value creation for investors. However, some business leaders feel that the current ISSB standards are lacking in this regard.
The study reveals that 42% of business leaders are seeking U.K. government incentives to support the upskilling of employees in sustainability and to strengthen the talent pipeline. This indicates the need for focused efforts to develop the necessary skills and expertise in sustainability across various industries.
Bruce J Cartwright CA, CEO of ICAS, emphasized that U.K. businesses require policy support to prioritize sustainability reporting. Without government mandates and incentives, there is a risk of falling behind international and European counterparts in implementing environmental, social, and governance (ESG) policies and addressing climate change. Business leaders stress that sustainability reporting should receive the same level of detail and scrutiny as financial reporting.
According to U.K. business leaders, if there is a General Election next year, the incoming government should focus on providing tax incentives or bonuses for companies that implement net zero targets. Additionally, business support and incentives to aid companies in implementing sustainability reporting are also highly desired.
