Relief, rigour, and a world on fire
London Climate Action Week: signals among the smoke
This year’s London Climate Action Week has felt different. Not just another rallying cry from those already convinced, but a shift in tone - more tactical, more commercial, and more grounded in operational delivery. We saw a recalibration: away from greenwashing headlines and towards credible, financeable plans.
The launch of the UK Green Taxonomy consultation and the release of implementation options for transition plans marked major inflection points. The UK Government’s commitment to mandate large companies and financial institutions to develop transition plans aligned to 1.5°C is no longer rhetorical. And the accompanying tone from Rt Hon Ed Miliband MP was clear: this is economic strategy as much as climate action. Net zero is now firmly on the industrial agenda.
While some civil society voices noted the corporate-heavy flavour of the week, there was also a growing consensus: implementation is the missing link. The real gap is no longer awareness, but action that withstands scrutiny.
Headlines this week
UK Government launched three major consultations:
a draft UK Sustainability Reporting Standard, designed to align with but adapt the ISSB baseline;
a proposed oversight regime for sustainability assurance, establishing regulatory guardrails for ESG attestation; and
a framework for mandatory transition plan implementation, moving beyond publication to enforceable delivery.
Ancoram submitted a formal response to the ISSB’s exposure draft to IFRS S2’s greenhouse gas emissions disclosures, calling for time-bound reliefs and stronger safeguards
Draft UK Sustainability Reporting Standards (UK SRS) now open for consultation
After a long and arduous process that started under the previous UK administration, on Wednesday Ed Miliband, Secretary of State for Energy and Net Zero, announced the UK equivalents of IFRS S1 and S2. UK Sustainability Reporting Standards (UK SRS) are closely modelled on the ISSB’s standards but depart in several areas to reflect the UK regulatory environment and market context. Key differences include:
Scope 3 GHG disclosures: While ISSB requires disclosure of Scope 3 where material, the UK SRS allows greater preparer discretion, especially for smaller companies, due to acknowledged data limitations and supply chain challenges.
Materiality approach: ISSB follows a single materiality lens focused on enterprise value. The UK SRS retains this framing but introduces UK-specific clarifications, including references to UK Companies Act requirements, creating a hybrid model that could evolve toward double materiality over time.
Terminology and definitions: The UK SRS modifies language to align with UK corporate governance norms—for instance, replacing some 'governance' terminology to reflect stewardship responsibilities under the UK Corporate Governance Code.
Timing and applicability: The UK SRS will initially apply only to UK-listed companies, with staged implementation tied to the UK's broader corporate reporting reform programme. This diverges from ISSB’s more globally consistent timetable.
Sector-specific guidance: The ISSB aims to minimise local variances. In contrast, the UK SRS signals potential sectoral tailoring, which may improve relevance but risks international misalignment.
While the UK approach aims to reduce preparer burden, particularly in early years, it introduces variability that could complicate cross-border comparisons and assurance.
The exposure drafts and consultation documents can be found here - the consultation period closes on 17 September 2025.
Sustainability assurance oversight: toward a formal supervisory regime
Ed Miliband also announced a new assurance consultation, which proposes a UK-specific regime for supervising sustainability assurance engagements, marking a shift from market-led innovation to regulatory oversight. Core proposals include:
Integration with the Financial Reporting Council: Unlike other jurisdictions where ESG assurance may be supervised by environmental regulators or industry bodies, the UK proposes to embed oversight within the FRC. This aligns ESG assurance with financial audit, reinforcing consistency and quality.
Competency requirements: The consultation suggests mandatory qualifications or competency standards for assurance providers. This sets a higher bar than the ISSA 5000 framework alone, requiring firms to demonstrate domain-specific expertise in ESG.
Independence rules: Stricter independence criteria are floated, borrowing from audit independence standards. This could preclude some ESG consultants from assurance work if they are also involved in implementation.
Proportionality and phased rollout: The regime would adopt a risk-based, proportionate approach. Larger companies would be prioritised, with SMEs subject to lighter expectations. A phased rollout mirrors the FRC’s approach to audit reform.
Compared to the EU, where sustainability assurance is being embedded via CSRD with flexibility for limited vs. reasonable assurance, the UK regime leans toward a higher, more audit-like bar from the outset.
Crucially, the proposed regime would also cover non-audit firms, such as specialist ESG consultancies and advisory firms, that provide assurance services. These providers, including those without statutory audit licences, would need to demonstrate compliance with the same independence and competency standards as audit firms. This could require significant upskilling, third-party verification, or structural separation from ESG advisory services to avoid conflicts of interest. It signals a marked shift: sustainability assurance is becoming a regulated profession, regardless of whether financial statement audit is in scope.
These changes can only be applauded - I have seen huge variations in the quality and depth of sustainability assurance procedures in recent years, from documentation to sample sizes, and crucial methodology overrides taken by assurance service providers to appease client stakeholders. I drafted MHA’s response to an earlier FRC market study last year, and am pleased (if not relieved) to see that many of these views have found their way into the proposals.
Transition plan implementation: from guidance to governance
This third consultation takes the Transition Plan Taskforce (TPT) framework and converts it from voluntary guidance into a potential compliance obligation. The consultation builds on but exceeds global precedent.
Beyond disclosure to delivery: Unlike the ISSB, which focuses on disclosure of transition risks and opportunities, the UK proposes that large companies must actively implement their plans, with regulatory oversight of progress.
Credibility criteria: The consultation incorporates TPT’s hallmarks of a credible plan - clarity on levers, interim targets, financing strategies, and board accountability - but suggests codifying these into law.
Governance embedding: Board-level responsibility would be mandatory, similar to the UK's Modern Slavery Act requirements. This goes further than ISSB or US SEC proposals, which emphasise governance but stop short of implementation obligations.
Regulatory supervision: If adopted, transition plan implementation would become a monitored component of annual reporting, subject to review by regulators or independent assurance bodies.
This proposal sets a global precedent. While other jurisdictions debate transparency, the UK is positioning itself as the first to mandate transition execution - not just strategy. It’s a bold move, with major implications for board accountability and investor scrutiny.
Relief proposals from the ISSB: threading the needle
The ISSB’s recent Exposure Draft proposed a range of amendments to IFRS S1 and S2, including new reliefs, guidance, and illustrative examples. On the surface, these amendments aim to ease preparer burden and encourage earlier adoption. Ancoram agrees with the direction of travel, but not at any cost.
Our submission to the ISSB underscores a central concern: reliefs must not mutate into loopholes. The proposal to allow emissions disclosures based on Scope 3 GHG Protocol methodologies, without additional safeguards or disclosure of underlying assumptions, risks undermining trust in reported data. Similarly, extended transitional reliefs, while helpful in early stages, must have firm sunset clauses.
Where the Exposure Draft succeeds is in clarifying confusion for financed, insured and facilitated emissions. But omissions remain. The Draft sidesteps the growing user demand for GWP20 disclosures, instead reaffirming GWP100 with no signal of future ambition.
Our headline message? Don’t trade rigour for reach. Disclosure must still mean something.
Final thoughts: get ready, or get left behind
For UK companies and financial institutions, the message is stark. Voluntary is becoming mandatory. Flexibility is giving way to scrutiny. ESG is maturing from a branding exercise into a compliance and performance discipline. Sustainability is now supervised.
I support this shift. But we also caution: the path forward must be navigable. Relief should never become a loophole. Ambition must never outrun accountability.
The world is on fire. Relief and rigour must walk hand in hand.