Stepping Up a Gear

We predicted in 2023 that there would be greater separation between those who are executing credible sustainable action and those who are not. And we weren’t far wrong. That’s because more detailed questions are being asked, and more organisations are being expected to answer. For example, this year we have seen 100s of organisations have their ‘Commitments Removed’ from SBTi. This is happening because regulation is increasing and climate reporting expectations are rising, so some organisations have no choice but to clearly disclose their sustainability impacts and risks – for better or worse.  Yet with risk comes opportunity. Next year as more organisations prepare for their detailed disclosure requirements, there will be a greater and wider understanding of what to measure and manage. This will widen the perceived gap between those who are, and those who are not credibly following fundamental sustainability frameworks. As a result, this will necessitate greater transparency and accountability that leads to more positive environmental impacts all round. Moreover, it will provide the good actors with more opportunities to positively distinguish themselves against their peers.  For 2024, there are multiple key sustainability initiatives and dates to look out for that apply to a variety of industries and business sizes: 

1. Corporate Sustainability Reporting Directive (CSRD) – January 2024

Applicable for: Large companies trading within the EU 

The CSRD is coming. What does that mean? It means it is becoming mandatory to disclose greenhouse gases for public-interest organisations with 500 or more employees within the EU from January 2024. As part of the disclosure organisations must share the information necessary to understand how they create impact, and how they are impacted by climate matters. This is called ‘double materiality’ and must include a company’s Scope 3 emissions. This data needs to be reported according to the European Sustainability Reporting Standards (ESRS). The ESRS underpins the CSRD and covers the full range of ESG issues, including climate change, biodiversity and human rights. ESRS E4 specifically focuses on biodiversity and ecosystems in significant detail which will help companies understand their influence in relation to nature so they can plan a nature-positive journey.  

The new standards will be applied for the first time in January 2024, and it will be a significant turning point in the sustainability diary as this will apply to over 50,000 organisations. It will also not stop there, as SMEs will be required to follow suit from 2026 onwards. It’s therefore best to get ahead of this curve and plan for compliance with these requirements sooner rather than later.  

2. Biodiversity Net Gain – January 2024

Applicable for: The built environment 

Biodiversity Net Gain requirements have been delayed to January 2024, however Defra have now issued the secondary legislation that contains further guidance. Developers and planning authorities need to understand the necessary requirements before Biodiversity Net Gain becomes mandatory. From January onwards, developers in England will be required to deliver 10% Biodiversity Net Gain when building new housing, industrial or commercial developments. This means by law they must deliver a measurable net positive for the local environment with initiatives like creating or restoring habitats. Biodiversity Net Gain for small sites will be applicable from April 2024, and implementation for Nationally Significant Infrastructure Projects remains planned for 2025. 

3. The Future Homes and Buildings Standards – March 2024

Applicable for: The built environment

This is a particular standard that will be implemented in 2025 as it will become mandatory to comply with the Future Homes Standard from then. However, a consultation on changes to Part 6, Part L and Part F for dwellings and non-domestic buildings as well as seeking guidance on Part O will close on 6 March 2024. This will be a welcome update as it will set out plans for achieving the Future Homes and Buildings Standards, and provide the technical proposals for changes to the Building Regulations. The Future Homes Standard aims to decarbonise new homes built from 2025 by improving heating, hot water systems and reducing heat waste which will produce 75-80% less carbon emission than homes built under the current Building Regulations. We work on a number of projects that already align to the Future Homes Standard and engage with clients closely to help them understand the cost-benefits.

4. Net Zero Buildings Standard - ‘Early 2024’

Applicable for: The built environment 

A consortium of professional bodies has been working on a single agreed definition for ‘Net Zero’ buildings to supersede the current UKGBC definition. The group will be releasing the UK Net Zero Carbon Buildings Standard at some point in early 2024. Unfortunately, this is another delayed deadline as the previous aspiration was for delivery in ‘late 2023’ and we don’t yet know specifically when this will arrive in 2024. The postponement is no surprise given the complexities of devising such a standard are considerable.  

Moreover, the Science Based Targets Initiative (the body that defined Net-Zero for Corporates) is currently working on a global definition of a 1.5C aligned or ‘net zero’ building. This will enable the industry to robustly demonstrate their built assets are aligned with some definition of Net Zero Carbon and national climate targets. Expect big picture target setting rules and definitions from SBTi and more prescriptive and quantitative guidance from the UK Net Zero Carbon Buildings Standard, as the UK definition will have to work together with the SBTi framework.  

5. International Sustainability Standards Board (ISSB) endorsement – July 2024

Applicable for: Large businesses

There have been several developments since the first publication of the ISSB standards were published in June 2023. ISSB was set up in 2021 at COP26 to develop global standards that will result in a high-quality, comprehensive global baseline of sustainability disclosures focused on the needs of investors and the financial markets. The UK government is due to be endorsing decisions on the ISSB’s first two standards:  

  • IFRS S1: General Requirements for Disclosure of Sustainability-related Financial Information 
  • IFRS S2: Climate-related Disclosures 


This means by July 2024, UK registered companies will be required to disclose globally comparable information that help investors with decision making and the efficient allocation of capital. Think of this like trading standards for sustainability. If you are a company making carbon or sustainability claims, then you must adhere to established rules and definitions and your claims must not be construed as misleading or illegitimate. This is a well needed step forward in sustainability and will hopefully help reduce the number of spurious claims and greenwashing we see so frequently.  

Getting Your Ducks in a Row

With these five significant changes looming, there is a strong sense of urgency amongst organisations to get themselves prepared for what’s to come. We are already seeing some organisations starting to increase their capabilities and understanding of these standards and requirements, so they will be well positioned for what’s to come.  

However more coherence and standardisation are definitely needed in the industry right now so that we can start to see the necessary behavioural changes within organisations. As more clear blue water between the leaders and laggards becomes apparent, we can start to prioritise lower environmental impacts in 2024 with more meaningful action. 

Have a great Christmas break and see you in the new year.