ESG Reporting: Your Guide to UK Requirements

Understanding ESG Reporting

Importance of ESG Reporting

Lately, ESG reporting has got everyone talking because of ongoing worries about climate change, social injustice, and shifty corporate behaviour. Investors, rule-makers, and folks with a stake in businesses really want to know who’s making a genuine effort to be kind to the planet and fair to people. Companies sticking to ESG rules show they’re owning up to their actions. It also helps people make smarter choices about where to put their money or trust. Understanding the specific ESG Reporting UK Requirements is essential for companies operating in the UK.

Being on the ball with ESG reporting is how businesses stay open and accountable, letting everyone see how they’re doing with their green goals, social fairness, and management practices. With more investors needing solid, detailed info—83% of them are super keen on full ESG reporting—it’s clear that setting up solid ESG strategies and crafting ESG policies is key for any business that wants to be in this for the long run.

Regulatory Environment

Across different regions, tougher rules are coming down the pipeline to nudge companies toward doing the right thing by the planet and people. Firms need to keep up with these laws to sidestep fines, keep a good name, and avoid losing their edge. In the global market, being responsible isn’t just a legal tick-box anymore; it’s about sticking around with happy, eco-savvy customers and investors.

In the UK, ESG rules quite literally set the stage:

• Companies Act 2006 Regulations: This old chestnut requires UK companies to spill the beans on how they’re doing in the environmental and social departments. It’s about keeping things clear and open regarding the mess they might be making.
• EU’s Non-Financial Reporting Directive (NFRD): Though it’s mainly about EU companies, UK businesses listed over there also need to follow the rules. This means being upfront about ESG activities, helping make info easy to compare and poke through.

For a nosey peek into these rules, check our breakdown on UK ESG regulations. With this framework, the UK steers companies to weave ESG into their reporting, aligning them with worldwide green goals.

Grasping why ESG reporting matters and knowing the rulebook is just the start for firms wanting to run ethical and sustainable operations. To keep learning the ropes and getting tips on best practices, dive into our rich pool of ESG strategy and ESG compliance resources.

ESG Reporting Requirements in the UK

Companies in the UK are feeling the heat when it comes to ESG (Environmental, Social, and Governance) reporting. Getting a grip on these regulations is key to staying in line and showing transparency. The two big names in the game? The Companies Act 2006 Regulations and the EU’s Non-Financial Reporting Directive (NFRD).

Companies Act 2006 Regulations

The Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 shook things up for bigger fish like large and medium-sized companies. They’re now expected to dish out details about their environmental, employee, and social shenanigans in the strategic report. This isn’t just to tick boxes; it gives everyone peeking in a look-see into their ESG dedication.

What You Gotta Share:

1. Environment: Companies need to spill the beans on how they’re affecting the environment—energy use, waste handling, the whole kit and caboodle.
2. Employee Stuff: They’ve gotta chat about how they treat their crew, including policies, diversity stats, and the overall vibe.
3. Social Bits: This means sharing the scoop on how they interact with communities, handle human rights, and other social hiccups.

Wanna drill down into these laws? Our UK ESG Regulations section has got you covered.

EU’s Non-Financial Reporting Directive (NFRD)

The EU’s directive, the NFRD, wormed its way into UK law via The Companies, Partnerships, and Groups (Accounts and Non-Financial Reporting) Regulations 2016. This one tells the big guys to open up about non-financial stuff like ESG.

Key Points to Note:

1. Big Players: It’s for companies with a workforce over 500 strong.
2. What to Report: They’ve gotta talk about the environment, their people, society, human rights, and any anti-bad stuff (corruption).
3. Choose Your Way: Companies can pick whichever reporting method works for their obligations.

Come January 2026, the NFRD is getting a facelift into the Corporate Sustainability Reporting Directive (CSRD), broadening its reach from 11,600 to around 49,000 outfits, including the listed small and medium-sized enterprises (SMEs).

Directive	Crowd It’s For	What to Chat About	Your Options
NFRD	Big dogs (over 500 folks)	Environment, Social, Employee, Human Rights, Anti-Corruption	Free choice in reporting style
CSRD	Large co’s and listed SMEs	Wider ESG topics	Set reporting from Jan 2026

Need more intel on non-financial reporting? Check out our ESG Reporting Standards.

These rules make it clear: playing nice with ESG is a must in business strategy and daily hustle. For the nuts and bolts on syncing up your ESG game plan with these rules, swing by our piece on building an ESG strategy.

Getting these rules nailed down isn’t just about dodging fines; it’s about earning brownie points with backers and stakeholders. For the lowdown on keeping your company on the up-and-up compliance-wise, have a gander at our ESG Compliance page.

UK-Specific ESG Reporting Regulations

Understanding what you gotta do for ESG reporting in the UK is vital if you want to stay on the right side of the law and give your sustainability practices the thumbs up. This bit covers two main UK regulations: Streamlined Energy & Carbon Reporting (SECR) and the Net Zero Transition Plans framework.

Streamlined Energy & Carbon Reporting (SECR)

So, SECR came into the world back in 2019 and wants specific companies to spill the beans on their energy use and carbon emissions alongside their yearly financial stuff. It’s all about pushing for energy efficiency and shrinking that environmental footprint.

Who Needs to Comply?

• Quoted companies: Ones you’ll find flaunting their shares on the main London Stock Exchange.
• Large unquoted companies: Those ticking at least two out of these three boxes: more than 250 staff, pulling in over £36 mil in turnover, or having a balance sheet total above £18 mil.
• LLPs: Big Limited Liability Partnerships that feel the same pinch as large unquoted firms.

If you’re guzzling less than 40,000 kWh a year, you’re off the hook for detailed reports, though you gotta still say you’re on a low-energy spree.

Reporting Requirements

Here’s the lowdown:

• Energy Use: Keep it in kWh or whatever suits you best.
• Greenhouse Gas Emissions: Serve up your emissions in tonnes of CO₂ equivalent.
• Intensity Ratio: Show at least one ratio connecting energy or emissions to economic output (like CO₂ tonnes per £ million turnover).

Requirement	Quoted Companies	Large Unquoted Companies & LLPs
UK Energy Use	Yes	Yes (if over 40 MWh)
Greenhouse Gas Emissions	Yes	Yes
Intensity Ratio	Yes	Yes
Energy Efficiency Actions	Yes	Yes

Want more on SECR? Check out where we deep-dive into esg compliance and esg regulations.

UK Disclosure Framework for Net Zero Transition Plans

Sliding into the Net Zero scene, this framework is about making sure companies are walking the talk on cutting emissions, with clear and action-packed plans. It’s wrapped up in the bigger UK Sustainability Disclosure Requirement (SDR), bringing together all things sustainability.

Key Bits

• Governance: Lay out who’s in charge of the net-zero roadmap.
• Strategy: Spill the details on how you’re hitting net-zero, including mini-goals along the way.
• Risk Management: Show how you spot, check out, and manage any climate risks.
• Metrics and Targets: Share the numbers and goals that prove you’re moving the net-zero needle.

What’s Happening When?

• 2021: The framework started showing its face, with folks trying it out voluntarily.
• 2023: Tweaks and changes are expected, thanks to feedback and chats with the industry folks.
• 2025: The full hit, with everything mandatory and running smoothly.

The whole gig’s about giving everyone involved a clear picture of who’s doing what when it comes to cutting emissions—no more pretending you’re greener than you are.

Want the nitty-gritty on UK sustainability efforts and what it means for businesses? Have a read on esg uk and esg and sustainability.

Getting with these UK rules not only ticks legal boxes, but it shows you’re serious about being green and ethical. That kind of stuff boosts your rep and can even bring in investors. If you want to make this a breeze, think about chatting with our esg consulting peeps or using esg reporting software to get the job done faster.

Investor Perspectives on ESG Reporting

Investor Preferences and Trust in ESG Information

Investors are elevating the role of solid and dependable ESG reporting in their decision-making. Recently, a survey showed that a whopping 83% of investors reckon it’s critical for ESG reports to lay out clear progress on ESG targets. Yet, only about a third think the current reports make the grade.

Investor confidence in ESG data spikes when it’s been verified by an outsider. In fact, 79% of investors prefer ESG info that’s validated by a third party. Moreover, it matters to three quarters of them that the ESG metrics get an independent stamp of approval. A solid 74% of investors believe their decisions would improve if companies stuck to a unified set of ESG reporting rules.

Leading ESG Considerations for Investors

Climate issues are stealing the spotlight in the ESG arena for investors. Cutting down on Scope 1 and 2 greenhouse gas emissions tops the list for 65% of them. Along the same lines, a cool 82% feel that weaving ESG into corporate strategy is crucial.

Amidst the overlapping frameworks causing a bit of a muddle, organizations like CDP, CDSB, GRI, ILPA, and SASB have come together, vowing to streamline corporate reporting.

Leading ESG Considerations	Percentage of Investors
Reducing Scope 1 & 2 GHG Emissions	65%
Embedding ESG in Corporate Strategy	82%
Trust in Assured ESG Information	79%
Importance of Independent Assurance	75%

For more in-depth details on ESG criteria, ESG metrics, and ESG integration, feel free to peruse our dedicated sections.

Investors are tuning in more to precise and trusted ESG information to shape their investment choices. Consequently, companies ought to direct their efforts towards credible ESG reporting to align with investor needs and boost trust.