Take it from the top
The third ICAS Sustainability Summit caught a mood of cautious optimism as the first set of reporting standards draws near, coupled with an awareness of the size of the task ahead. Ryan Herman reports

Take it from
the top
The third ICAS Sustainability Summit caught a mood of cautious optimism as the first set of reporting standards draws near, coupled with an awareness of the size of the task ahead. Ryan Herman reports

The ICAS Sustainability Summit returned for its third instalment in April. The choice of venue, on the fifth floor of the old County Hall on London’s South Bank, was entirely apt and wholly intentional, as it’s home to Sustainable Ventures along with 130 climate tech start-ups.
As outgoing President, Alison Cornwell CA, observed in her opening remarks: “The need for this summit feels even more pressing given the current political global climate and Donald Trump’s return to the White House. While the voices of those in denial might have grown louder… I’m sure that all of us here today are very aware that climate change isn’t an issue we can simply choose to ignore.”
It was heartening to hear from host Roger Harrabin, who was one of the first dedicated environmental reporters at the BBC, that accountants are leading the charge on sustainability.
So for those who couldn’t make it, and as a recap for those who did, here is a summary of some of the key points from a fascinating and enlightening afternoon in London.
What ICAS is doing…
Cornwell set out ICAS’ sustainability policy positions:
1) Support for the adoption of double materiality, which means measuring the impact of a company’s operations on society and the environment, as well as the impact of these factors on the company balance sheet (which is single materiality).
2) For sustainability reporting to be made mandatory and proportionate for certain classes of entity.
3) The need for a level playing field for sustainability assurance professionals, including adherence to robust standards.
4) Our belief that progress to net zero is urgently required throughout the economy, and must be facilitated by rapid decarbonisation and transparent reporting of gross carbon inventories.
UK sustainability reporting standards are coming… soon
During the first panel session Andrew Death, Deputy Director of Corporate Reporting, Assurance and Governance at the Department for Business and Trade, said there will be a package of three consultations on the UK Sustainability Reporting Standards (UK SRS) this year, along with a fourth that will focus on streamlining corporate reporting and easing the compliance burden on businesses.
“As well as looking at the new UK reporting standards, we’re also looking to review what’s there at the moment,” he said. “So there will be a consultation later in the year to try to come up with ideas as to how we can rationalise and reduce the overarching burden of corporate reporting and focus on decision-useful information.”
Too much information?
In the same session Melanie Fox, Group Reporting Manager for ESG at Vodafone, spoke about the complexities of meeting current reporting expectations across different territories – the phone giant’s environmental, social and governance (ESG) reports will include around 600 data points.
"Larger corporates will push ESG expectations down the supply chain because they’ll have to report on it”
Fox used an expression picked up while travelling in Thailand – “same, same, but different”. On the face of it, Fox said, the reporting requirements across territories such as Europe and Africa may look very similar, but different auditors in different territories will have their own ideas of whether those standards are being met. Not surprisingly, she called for “simplification” and, where there is more than one reporting framework, “interoperability”.
Reliable, consistent, comparable
The event’s keynote speaker was Sally Duckworth, Chair of the UK Sustainability Disclosure Technical Advisory Committee (TAC). We covered much of the content of her speech – in which she stressed that investors want reliable, consistent, comparable information – in our recent interview.
She offered advice on where businesses preparing for the formal introduction of UK SRS should begin: “Start with what matters most and don’t try to do it all at once. Focus on key metrics relevant to your company and start with those. You can then add to them in time, and each year improve on what you’re reporting on and build data collection into your processes.”
It is expected that there will be mandatory reporting for UK listed companies. “Even if you’re not mandated, you will be affected,” said Duckworth. “Many SMEs assume they won’t be impacted by this and it’s only for larger, listed companies. But that’s just not true. Larger corporates will push ESG expectations down the supply chain because they’ll have to report on it.”
What we can learn from accounting
Duckworth pointed out that accounting reporting standards started small and evolved over time – and this may be the way to go with their sustainability counterpart. She also highlighted a potential issue with an “inevitable lag” in the supply chain when compiling sustainability reports, as not every company involved in that chain will supply information at the same time.
What we can learn from the EU
A point that was made several times, albeit in different ways, is that while the EU has led the way on sustainability reporting, there is a growing sense that the sheer number of data points companies have to produce creates a risk of making the process a burden rather than an opportunity.
Speaking from a personal rather than professional perspective, Sarah-Jayne Dominic, Head of the TAC Secretariat, said in the second panel session that in America there was a kneejerk reaction to remove everything that exists whereas the EU feels that it (the EU) went “too far, too quickly. So they’re not repealing everything, they’re just asking what can be done, practically, and what makes sense.”
She added, “Now in the UK, we do have the luxury of having witnessed what’s happening in other geographies, so we are able to learn from that.”
From left: Melanie Fox, Sarah-Jayne Dominic, Andrew Death
From left: Melanie Fox, Sarah-Jayne Dominic, Andrew Death
Joined-up thinking
For the government, Death said the accounting profession will clearly play a key role in producing sustainability reports, but warned against relying solely on accountants when it comes to areas such as transition planning for net zero.
He is also keen to speak to colleagues in Europe about interoperability, with the ultimate goal being the EU and the UK only having to report under one set of requirements – although he conceded that is an ambitious target.
What investors are looking for
Lloyd McAllister CA, Head of Sustainable Investment at Carmignac, said investors want to know what injection of capital is required for a company to make a sustainable transition. He cited the example of VW’s 2014-15 company accounts, which mentioned “energy transition” in relation to regulation risks and new models but with no indication that would cost the company an estimated €100bn (£85bn) in capital expenditure, wiping out its free cashflow for six of the next 10 years and obliging it to write off €20bn.
McAllister was pleased that the new standards will include a requirement to put a figure on the sustainability-related risks and opportunities affecting the business in the short, medium and long term, and stated this will be “materially useful for investors”.
In conclusion
Commenting on the event, Sarah Wilkin CA, Director of Sustainability at ICAS, said: “As the journey to net zero continues, the UK SRS will play a pivotal role in not only helping businesses transparently report on their progress towards climate goals but ensuring they can continue to meet market demands from customers and investors. Our summit brought together key stakeholders from across government, regulation and business to deliver valuable dialogue on these incoming standards and their corporate impact.”
Wilkin was enthused by the ambitious aim for equivalence with the EU and the “global first with flexibility” approach, leaving the door open for companies to do more, particularly as the standards are expected to evolve over time. The importance of the investor perspective was abundantly clear – there is a need for concrete information on the cost of transition planning to a low-carbon economy, and such plans need to be commercially viable with a clear path for implementation. Even if not mandated, businesses will be indirectly affected through supply chains and early adopters will gain an advantage – as Duckworth concluded in her keynote, “let’s not wait, let’s lead”.
It is often said, wrongly, that climate change will destroy the planet. The planet will live on, but climate change is a threat to humankind. Or as CEO Bruce Cartwright CA stressed in his closing remarks: “The planet is not the problem – we are. And we are also the solution."
For more, visit our sustainability resources
The ICAS Sustainability Summit returned for its third instalment in April. The choice of venue, on the fifth floor of the old County Hall on London’s South Bank, was entirely apt and wholly intentional, as it’s home to Sustainable Ventures along with 130 climate tech start-ups.
As outgoing President, Alison Cornwell CA, observed in her opening remarks: “The need for this summit feels even more pressing given the current political global climate and Donald Trump’s return to the White House. While the voices of those in denial might have grown louder… I’m sure that all of us here today are very aware that climate change isn’t an issue we can simply choose to ignore.”
It was heartening to hear from host Roger Harrabin, who was one of the first dedicated environmental reporters at the BBC, that accountants are leading the charge on sustainability.
So for those who couldn’t make it, and as a recap for those who did, here is a summary of some of the key points from a fascinating and enlightening afternoon in London.
What ICAS is doing…
Cornwell set out ICAS’ sustainability policy positions:
1) Support for the adoption of double materiality, which means measuring the impact of a company’s operations on society and the environment, as well as the impact of these factors on the company balance sheet (which is single materiality).
2) For sustainability reporting to be made mandatory and proportionate for certain classes of entity.
3) The need for a level playing field for sustainability assurance professionals, including adherence to robust standards.
4) Our belief that progress to net zero is urgently required throughout the economy, and must be facilitated by rapid decarbonisation and transparent reporting of gross carbon inventories.
UK sustainability reporting standards are coming… soon
During the first panel session Andrew Death, Deputy Director of Corporate Reporting, Assurance and Governance at the Department for Business and Trade, said there will be a package of three consultations on the UK Sustainability Reporting Standards (UK SRS) this year, along with a fourth that will focus on streamlining corporate reporting and easing the compliance burden on businesses.
“As well as looking at the new UK reporting standards, we’re also looking to review what’s there at the moment,” he said. “So there will be a consultation later in the year to try to come up with ideas as to how we can rationalise and reduce the overarching burden of corporate reporting and focus on decision-useful information.”
Too much information?
In the same session Melanie Fox, Group Reporting Manager for ESG at Vodafone, spoke about the complexities of meeting current reporting expectations across different territories – the phone giant’s environmental, social and governance (ESG) reports will include around 600 data points.
"Larger corporates will push ESG expectations down the supply chain because they’ll have to report on it”
Fox used an expression picked up while travelling in Thailand – “same, same, but different”. On the face of it, Fox said, the reporting requirements across territories such as Europe and Africa may look very similar, but different auditors in different territories will have their own ideas of whether those standards are being met. Not surprisingly, she called for “simplification” and, where there is more than one reporting framework, “interoperability”.
Reliable, consistent, comparable
The event’s keynote speaker was Sally Duckworth, Chair of the UK Sustainability Disclosure Technical Advisory Committee (TAC). We covered much of the content of her speech – in which she stressed that investors want reliable, consistent, comparable information – in our recent interview.
She offered advice on where businesses preparing for the formal introduction of UK SRS should begin: “Start with what matters most and don’t try to do it all at once. Focus on key metrics relevant to your company and start with those. You can then add to them in time, and each year improve on what you’re reporting on and build data collection into your processes.”
It is expected that there will be mandatory reporting for UK listed companies. “Even if you’re not mandated, you will be affected,” said Duckworth. “Many SMEs assume they won’t be impacted by this and it’s only for larger, listed companies. But that’s just not true. Larger corporates will push ESG expectations down the supply chain because they’ll have to report on it.”
What we can learn from accounting
Duckworth pointed out that accounting reporting standards started small and evolved over time – and this may be the way to go with their sustainability counterpart. She also highlighted a potential issue with an “inevitable lag” in the supply chain when compiling sustainability reports, as not every company involved in that chain will supply information at the same time.
What we can learn from the EU
A point that was made several times, albeit in different ways, is that while the EU has led the way on sustainability reporting, there is a growing sense that the sheer number of data points companies have to produce creates a risk of making the process a burden rather than an opportunity.
Speaking from a personal rather than professional perspective, Sarah-Jayne Dominic, Head of the TAC Secretariat, said in the second panel session that in America there was a kneejerk reaction to remove everything that exists whereas the EU feels that it (the EU) went “too far, too quickly. So they’re not repealing everything, they’re just asking what can be done, practically, and what makes sense.”
She added, “Now in the UK, we do have the luxury of having witnessed what’s happening in other geographies, so we are able to learn from that.”
From left: Melanie Fox, Sarah-Jayne Dominic, Andrew Death
From left: Melanie Fox, Sarah-Jayne Dominic, Andrew Death
Joined-up thinking
For the government, Death said the accounting profession will clearly play a key role in producing sustainability reports, but warned against relying solely on accountants when it comes to areas such as transition planning for net zero.
He is also keen to speak to colleagues in Europe about interoperability, with the ultimate goal being the EU and the UK only having to report under one set of requirements – although he conceded that is an ambitious target.
What investors are looking for
Lloyd McAllister CA, Head of Sustainable Investment at Carmignac, said investors want to know what injection of capital is required for a company to make a sustainable transition. He cited the example of VW’s 2014-15 company accounts, which mentioned “energy transition” in relation to regulation risks and new models but with no indication that would cost the company an estimated €100bn (£85bn) in capital expenditure, wiping out its free cashflow for six of the next 10 years and obliging it to write off €20bn.
McAllister was pleased that the new standards will include a requirement to put a figure on the sustainability-related risks and opportunities affecting the business in the short, medium and long term, and stated this will be “materially useful for investors”.
In conclusion
Commenting on the event, Sarah Wilkin CA, Director of Sustainability at ICAS, said: “As the journey to net zero continues, the UK SRS will play a pivotal role in not only helping businesses transparently report on their progress towards climate goals but ensuring they can continue to meet market demands from customers and investors. Our summit brought together key stakeholders from across government, regulation and business to deliver valuable dialogue on these incoming standards and their corporate impact.”
Wilkin was enthused by the ambitious aim for equivalence with the EU and the “global first with flexibility” approach, leaving the door open for companies to do more, particularly as the standards are expected to evolve over time. The importance of the investor perspective was abundantly clear – there is a need for concrete information on the cost of transition planning to a low-carbon economy, and such plans need to be commercially viable with a clear path for implementation. Even if not mandated, businesses will be indirectly affected through supply chains and early adopters will gain an advantage – as Duckworth concluded in her keynote, “let’s not wait, let’s lead”.
It is often said, wrongly, that climate change will destroy the planet. The planet will live on, but climate change is a threat to humankind. Or as CEO Bruce Cartwright CA stressed in his closing remarks: “The planet is not the problem – we are. And we are also the solution."
For more, visit our sustainability resources