Reporting Intelligence – January 2025

Richard Costa

Our Reporting Intelligence pages are a treasure trove of insightful reads, we’ve done the hard work, so you can stay informed without the hassle.

Explore this month’s latest updates including new SME sustainability standards launched by EFRAG, TAC’s endorsement of IFRS adoption, and the expansion of the FRC’s governance role.

1. EFRAG releases voluntary sustainability reporting standard for non-listed SMEs

The European Financial Reporting Advisory Group (EFRAG) has introduced a “voluntary sustainability reporting standard” (VSME) for non-listed small and medium-sized enterprises in Europe. This standard simplifies ESG reporting and addresses the growing demand for sustainability data from SMEs despite their exclusion from the Corporate Sustainability Reporting Directive (CSRD).

A key feature replaces complex double materiality analysis with a straight forward ‘if applicable’ principle for disclosures, responding to concerns about costs and reliability. EFRAG aims to enhance ESG reporting for SMEs and facilitate access to green financing, with plans to support implementation in 2025 through educational materials and campaigns.

Access the new standard here

 

2. UK Advisory Committee calls for adoption of IFRS Sustainability Reporting Standards

The UK government-mandated Sustainability Disclosure Technical Advisory Committee (TAC) has published recommendations endorsing the IFRS Foundation’s International Sustainability Standards Board (ISSB) climate and sustainability-related reporting standards for use by companies in the UK.

While the TAC supports the adoption of IFRS S1 and S2, it has also suggested some amendments to the standards. Notably, the TAC recommends extending the ISSB’s “climate-first” relief, which allows companies an additional year to disclose certain sustainability-related risks, to two years. This extension would enable companies to focus primarily on climate-related reporting first.

Read more here

 

3. The FRC publishes its draft Strategy 2025–28

The Financial Reporting Council (FRC) has released a consultation on its draft Strategy for 2025–2028 alongside its draft Annual Plan and Budget for 2025–2026. The FRC is inviting comments on these documents until February 6, 2025.

The draft Strategy focuses on four objectives:

1. Enhance corporate governance and reporting.

2. Promote high quality among responsible parties while addressing regulatory issues.

3. Adapt to the opportunities and challenges in reporting and audit markets.

4. Evolve into a modern and inclusive regulator.

The draft Annual Plan and Budget outline activities to achieve the Strategy, detailing operational requirements, needed resources, and success measurement targets.

Access the full draft here

 

4. The FRC to lead the governance of Wates Principles for large private companies

The Financial Reporting Council (FRC) will take over governance of the Wates Corporate Governance Principles for Large Private Companies as Sir James Wates CBE stepped down as chair of the Coalition Group on December 31, 2024.

The Wates Principles, developed in response to the 2018 Government Corporate Governance Reform agenda, provide a framework for large private companies to implement sound governance practices and transparent reporting. The FRC has reported that under Sir James’s seven-year leadership, companies adhering to these principles have collectively contributed over £850 billion to the UK economy. The FRC will continue to uphold high governance standards while promoting economic growth.

Read more here

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Get in touch:

If you’d like to discuss this, or any other subject, please get in touch with Richard Costa at richardc@gather.london

We’d love to hear from you.

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Richard Costa

Reporting Intelligence – January 2025

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