ACCA backs voluntary approach to sustainability assurance

Global accountancy body ACCA is backing the UK government's plan to introduce voluntary registration rules for sustainability assurance.

ACCA says any new regime must include a clear pathway towards mandatory registration - where only registered providers can deliver sustainability assurance.

Sustainability assurance - an independent examination of a company's sustainability information to verify its accuracy and reliability - provides stakeholders with confidence in its environmental, social, and governance (ESG) disclosures and commitments.

Maggie McGhee, Executive Director -Strategy and Governance, ACCA, said: 'A voluntary approach provides space for assurance providers to build capability and adapt to new requirements, helping the market to grow.

'There is, though, a risk, that the UK approach could be perceived as less robust than other jurisdictions that have introduced mandatory assurance requirements. It is important, therefore, to signal the intention to move in due course to a mandatory regime, building on lessons learned from the initial voluntary arrangements.'

ACCA says the UK is well positioned to influence the sustainability assurance agenda both domestically and globally, building on its strong corporate governance framework. In developing the regime and adopting sustainability assurance standards it is important to ensure international interoperability to support cross-border consistency and market confidence.

ACCA is also supportive of a profession-agnostic approach, where both accountants and non-accountants are permitted to provide assurance services, provided there is a level playing field when it comes to standards, regulation and oversight. This approach recognises the broad and deep expertise required for the diverse and technical topics covered by sustainability reporting. The primary goal is to ensure high-quality assurance, which requires expertise in both assurance techniques and the relevant subject matter, including its measurement and evaluation. This approach - not confining assurance providers to any particular profession or qualification - also aligns with developing international practices.

Progress on sustainability assurance must go hand in hand with the development of sustainability reporting disclosures. ACCA therefore welcomes the recent release of the consultation on the UK Sustainability Reporting Standards (UK SRS S1 and S2), as well as the latest consultation on ISSA (UK) 5000 issued by the FRC. These consultations represent the first step in developing a UK sustainability reporting framework that is fit for the long term.

Glenn Collins, Head of Technical Advisory and Strategic Engagement, ACCA UK, said: 'The assurance regime should enhance the quality, consistency, and credibility of sustainability disclosures which will improve investor access to reliable, decision-useful information. This is essential for mobilising private capital toward productive, innovative, and sustainable sectors, and for enhancing the UK's ability to attract a greater share of internationally mobile investment.'

ACCA's response is here

The government consultation is here