Such reporting offers insights on the company’s impact on the environment and society and is believed to enhance company management. ICAS is urging mandatory sustainability reporting, while keeping it proportionate to the business’s size.

DBT’s non-financial review aligns with their agenda post-Brexit, focusing on the ‘Smarter regulation to grow the economy policy’. This policy envisions a more streamlined regulatory landscape for companies in the UK.

ICAS’s emphasis on non-financial reporting isn’t new. Over the years, they have repeatedly called for transparent reporting on the social and environmental implications of businesses. They have also advocated for a regulatory shift towards concise business model reporting, considering strategic reports have expanded by approximately 60% over the past five years due to regulatory demands.

The rapid evolution in non-financial reporting has led to a surge in demand for relevant skills and training. ICAS has identified a gap in the market, noting that the current pace of regulatory and stakeholder expectations surpasses the rate at which knowledge is being acquired, especially concerning sustainability reporting.

J Bruce Cartwright CA, ICAS CEO said: “We believe the UK government needs to make sustainability reporting mandatory and use reporting standards that facilitate global comparability and interoperability with other standards.

“This would mirror other jurisdictions like the EU, where reporting in accordance with European Sustainability Reporting Standards (ESRS) is already mandated for certain entities.

“We think the information on the UK government’s proposed framework to create UK Sustainability Disclosure Standards (SDSs), released on 2 August 2023, is a welcome step in the right direction, and we will continue to encourage the UK government to mandate sustainability reporting.

“Of course, a proportionate approach is required so that companies are not unduly burdened in meeting any potential legal obligation to make sustainability related disclosures”.

Mr Cartwright added: “We support reforms which should lead to more succinct strategic reports, at the same time as supporting an increase in sustainability reporting.

“However, we also recognise the challenges faced by the DBT in making meaningful reforms which result in proportionate requirements for the preparation of non-financial information, as well as meeting the needs of investors and other stakeholders.”

The Association of Chartered Certified Accountants (ACCA) also weighed in, acknowledging the crucial role of non-financial reporting in making informed decisions for managers, investors, and other stakeholders.

ACCA pointed out the current disjointed landscape of non-financial reporting, advocating for ‘smarter regulation’ to drive prosperity and provide better investment insights. Glenn Collins, head of technical and strategic engagement, ACCA UK, expressed the need for high-quality non-financial reporting to represent intangibles not typically included on balance sheets.

ACCA also urged alignment with international standards and underscored the importance of keeping UK revisions in harmony with global reporting developments.

Mr Collins emphasised: “Developing a nuanced UK-specific reporting regime may reduce comparability of entities operating within the UK market and may deter investment and the ability to compare UK entities across a global and comparable baseline.

“In addition, diversions from wider reporting regimes, such as those appearing within the EU (for example the EU Taxonomy) may result in duplication and complexity.”

Both institutions concur on the importance of proportionate reporting obligations, resonating with the broader sentiment that any reporting requirements should be tailored to the size and intricacies of the concerned organisation.