UK FI Sustainability Reporting Benchmark 2023

What this is (in brief):

‍We reviewed public annual reports and related disclosures from 51 institutions in November 2023 to benchmark approaches to sustainability across the sector. Use it to calibrate your next reporting cycle and plan where to focus.

‍Download the full report.

What stood out

• Materiality is behind the curve. Only about a third disclosed a materiality assessment, and fewer showed clear double materiality. Outputs often listed too many priorities and rarely covered the lending book in depth.
• Sustainability strategy exists, level of embedding varies. Around two thirds had a sustainability strategy; larger full-service banks did more to embed it into corporate strategy. Many framed plans by E, S and G rather than material topics or corporate priorities.
• Reporting is settling in. SECR and TCFD adoption rose, but the harder-to-measure elements of financed emissions and supply-chain data were thin. Nature reporting was early stage, with a few TNFD pilots.
• Targets are widespread, detail isuneven. About half set long-term targets, mostly 2050 net zero. Interim milestones were patchier, science alignment inconsistent, and scope 3 coverage unclear in many cases.
• Carbon credits need care. Many bought credits and some claimed operational carbon neutrality. Expectations are tightening, with a shift toward beyond-value-chain mitigation and clearer disclosures.

What to do next

1. Run a proportionate double materiality assessment. Prioritise an evidence-based short list of issues that really matter from an impact, risk and opportunity perspective. Be sure to consider the impacts from your lending portfolio, not just your operations.
2. Fold sustainability into the core plan. Align strategy, risk and capital allocation; avoid standalone lists - particularly avoid falling back to an "ESG" structure to describe your sustainability approach. Few things scream "tick box" louder.
3. Get ready for tighter disclosures. Build toward ISSB and transition planning, set clear targets with interim steps, state scope coverage, and handle use of carbon credits robustly.

How to use this benchmark:
Sense-check your structure and depth against peers, borrow what works, and pick some improvements for this reporting year.

‍Download the 2023 benchmark.

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