“The Chancellor’s announcement is an extremely positive step in the fight against climate change. It’s been clear for some time that business need to move from purpose statements and pledges, to really focus on detailed transition plans and to start seeing hard evidence of action being taken.
“Making the requirement mandatory makes it slightly easier for companies to move at pace. If all those businesses in scope have to adhere to the same requirements, it keeps the playing field level for all. While some businesses have moved quickly to lead in this space – seeing positive growth and value opportunities in leading the charge – there is no doubt that some have been waiting for others to make the first move. Mandatory reporting requirements removes this ‘I’ll go when you go’ scenario, which can only be a positive thing.
“This announcement, coupled with the GFANZ commitment for $130 trillion of investment to finance net zero transition and the establishment for the ISSB to work towards a global consistent set of sustainable reporting standards, marks a pivotal moment for business to demonstrate their contribution to the climate and broader sustainability agenda.”
Rob Doepel, EY’s UK Managing Partner - Sustainability, adds:
“But it won’t be plain sailing. The challenge for companies will be how to construct these plans and what level of detail is required to be compliant. A potential stumbling block here could be the amount of time spent agreeing common standards. The taskforce needs to set bold time targets on agreeing the framework, but this shouldn’t distract from other positive action being taken – there are many ‘no regret’ steps that companies can take without having detailed, comprehensive decarbonisation plans in place. Our recent Climate Business Forum report outlined 11 steps any business can take that will get them moving along the journey to net zero
“What is still vitally important though, is for listed business leaders to continue to set ambitious, stretch targets and plans. It will be vital to ensure this process does not lead to businesses ‘dampening down’ their ambitions as the fear of market and reputational repercussions of not meeting a stated pledge or plan, outweighs being brave and bold in your climate ambition.”