Regulatory and Standards Tracker

IFRS Guide - Applying IFRS S1 when reporting only climate-related disclosures in accordance with IFRS S2

In January 2025, the IFRS Foundation published guidance entitled – Applying IFRS S1 when reporting only climate-related disclosures in accordance with IFRS S2. The guidance aims to assist preparers to understand which requirements in IFRS S1 apply when a company discloses information relating to climate-related risks and opportunities only in accordance with IFRS S2. The guidance reflects the approach that is permitted by ISSB Standards.

FCA delays publication of policy statement on application of SDR to portfolio management

In February 2025, the FCA published a statement indicating that the FCA intends to delay the rules extending SDR to portfolio management. The aim is that any such extension delivers good outcomes for consumers, is practical for firms and also supports growth of the sector. Accordingly, the FCA intends to take time to deliver on these goals and a policy statement is therefore not expected in the second quarter of the year. The FCA intends to continue to reflect on the feedback received and will also provide an update in due course.

EBA Final Report on Guidelines on the management of ESG risks

Following the consultation in 2024, in January, the European Banking Authority published its Guidelines on the management of environmental, social and governance (ESG) risks. The guidelines set out requirements for the internal processes and ESG risk management arrangements that financial institutions should have in place to ensure the resilience of the business model and risk profile of institutions in the short, medium and long term. The guidelines will apply from 11 January 2026 except for small and non-complex institutions for which the guidelines will apply at the latest from 11 January 2027.

From concept to delivery: accounting for climate and nature in maintaining price stability and keeping banks safe and sound

In February, the European Central Bank published a speech by Frank Elderson (ECB Executive Board Member and Supervisory Board Vice-Chair) on climate and nature-related activities at the ECB.

New standards and guidance issued by IAASB and IESBA

In January, the International Auditing and Assurance Standards Board and the International Ethics Standards Board for Accountants launched new interoperable baseline standards and guidance for the purpose of enhancing trust and transparency and establishing expectations for ethical behaviour in sustainability reporting and assurance. ISSA 5000 and IESSA become effective on or after 15 December 2026 and early adoption is permitted and encouraged.

UK publishes national biodiversity strategy

On 26 February 2025, the Department for Environment, Food and Rural Affairs and published the UK national biodiversity strategy and action plan for 2030.

Commission and EIB plans for Sustainable Housing

The European Commission and the European Investment Bank Group are partnering with Europe’s national promotional banks and international financial institutions to develop new financing opportunities for affordable and sustainable housing across Europe.

IOSCO: Work programme for 2025

On 12 March the International Organization of Securities Commissions published its work programme for 2025 which includes address risks in sustainability.

FCA statement in relation to sustainability regulation and UK defence

Plans to increase defence spending have coincided with the FCA’s statement in relation to sustainability regulations and UK defence making clear that FCA rules are aimed at ensuring transparency and comparability of sustainability information leaving it to lenders and investors to determine whether to finance defence companies. The FCA refers to the internal policies of financial institutions as being the deciding factor. Nevertheless, defence-related policies are referred in in sustainability-related disclosures and reporting and often form part of investment processes including (but not limited to) screening policies.