Less than a third of financial services firms are equipped to handle any substantial ESG reporting data, according to a poll conducted by Bovill Newgate in a recent webinar.
This is despite the vast majority (90%) of firms recognising that environmental, social and governance (ESG) is a “crucial focus area”.
Due to the UK’s Sustainability Disclosure Requirements (SDR) firms will be required to evidence their reporting data from 31 July 2025.
Additionally, the EU’s Sustainable Finance Disclosure Regulation (SFDR) “demands immediate attention”.
Bovill Newgate funds practice lead Abi Reilly said: “With SDR, it’s understandable if firms are just beginning now.
“However, with reporting deadlines only a year away on 31 July, they must not underestimate the time and resources needed to prepare the necessary reports.
“Our message is simple, although the reporting requirements may be complex: don’t delay.
“If you’re aiming for a label or will be drawn into the regime by marketing funds to retail clients using so-called ‘green’ language, you will need to be in a position to make the relevant disclosures.
“Even if your focus is only on professional investors and you decide not to use a label, you will still need to substantiate any claims made in investor marketing documents in order to comply with anti-greenwashing regulations.
“It seems to me you need data. Everyone needs data. Even firms currently reporting under SFDR might not be doing so in the most effective way.
“Deciding on what data you need, gathering it efficiently and supporting your portfolio companies to improve their data over time is the key to successful reporting and compliance with the both the letter and the spirit of the UK and EU regimes.”
Treety co-founder and chief executive Hatim Baheranwala added: “Many firms still have their reporting frameworks in a theoretical place – or worse, haven’t taken a clear stance on what they would like to report.
“We know from experience that the moment the rubber hits the road and it gets in front of boards and investors, there’ll be questions around data completeness and data accuracy assumptions.
“The quicker firms can get to a point of formalising their reporting processes and working with real reporting data, the better.
“The launch of the UK SDR is one more from a long list of signals that the movement towards increased ESG and sustainability related reporting is irreversible.”
Bovill Newgate is an Ocorian company and specialist financial services regulatory consultancy with a multi-jurisdictional offering across the UK, the Channel Islands, Singapore, Hong Kong, Mauritius and the Americas.
Treety is Ocorian’s ESG reporting partner.
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