The Financial Reporting Council (FRC) has highlighted that even though the UK market for sustainability assurance is performing 'well', concerns over the consistency of quality persist as demand continues to increase.
These findings were released in FRC's final report on the assurance of sustainability reporting, conducted in 2024.
The report, based on stakeholder engagement, outlines the current state of the UK's sustainability assurance market and suggests measures to enhance its functionality.
Stakeholders include FTSE 350 and private companies, audit and non-audit service providers, investors, and various organisations involved in sustainability.
To foster market development, the FRC recommends establishing a definitive UK policy framework for sustainability assurance, ensuring medium-term certainty and alignment with international standards.
The recommendations also include creating a unified regulatory regime for standard setting, oversight, and market monitoring, and improving information quality on sustainability assurance services.
The FRC has committed to advising the UK Government on shaping the country's policy and regulatory framework for sustainability assurance.
FRC Regulatory Standards executive director Mark Babington said: "This report provides us with a clearer picture of the UK's rapidly developing sustainability assurance market which companies, assurance providers and investors are currently navigating, as reporting expectations continue to develop in this important space.
"The findings provide a baseline understanding, that we will continue to build on, so we are best placed to support our stakeholders in this market as demand continues to grow."
This follows the FRC's recent campaign to support SMEs in securing audit services and reducing reporting burdens, thereby enhancing their access to capital and growth potential.
"FRC report raises concerns over UK sustainability assurance" was originally created and published by International Accounting Bulletin, a GlobalData owned brand.