Interview: practitioners on Standards & certifications — what they wish they knew earlier

The UK sustainability certification market reached £4.2 billion in 2024, yet a striking 67% of FTSE 350 companies report significant challenges navigating the increasingly complex landscape of overlapping standards. As the Corporate Sustainability Reporting Directive (CSRD) reshapes disclosure requirements and UK regulators signal alignment with international frameworks, practitioners across sectors are confronting hard truths about what certification actually costs, where adoption stalls, and which emerging standards merit strategic attention. We spoke with sustainability directors, certification consultants, and procurement leaders who shared candid reflections on lessons learned—and what they wish they had known before embarking on their certification journeys.

Why It Matters

The convergence of regulatory pressure, investor expectations, and supply chain requirements has transformed sustainability certifications from voluntary differentiators into operational necessities. In 2024, the UK Green Finance Strategy committed £10 billion toward sustainable infrastructure, with certification requirements embedded across public procurement frameworks. The Financial Conduct Authority's Sustainability Disclosure Requirements (SDR), fully implemented in late 2024, now mandate that asset managers with over £5 billion in assets under management disclose portfolio-level sustainability metrics aligned with recognised taxonomies.

For UK businesses, the stakes are considerable. Research from the British Standards Institution (BSI) indicates that companies with third-party sustainability certifications experienced 23% faster access to green finance in 2024 compared to uncertified peers. Meanwhile, procurement data from the Crown Commercial Service shows that 78% of major government contracts now include sustainability certification requirements, up from 52% in 2022.

The global picture adds further urgency. The International Sustainability Standards Board (ISSB) finalised its inaugural standards—IFRS S1 and S2—in June 2023, with jurisdictions worldwide moving toward mandatory adoption. The European Union's CSRD, affecting an estimated 50,000 companies including UK subsidiaries of EU parent firms, requires assurance-ready sustainability reporting from financial year 2024 onwards. For UK companies maintaining EU market access post-Brexit, alignment with EU Taxonomy criteria has become a practical commercial requirement rather than a regulatory choice.

"Three years ago, certification was primarily a marketing exercise," observes Sarah Mitchell, Director of Sustainability at a major UK retailer. "Today, it determines whether we can bid on contracts, access capital at competitive rates, and maintain our position in European supply chains. The unit economics have fundamentally shifted."

Key Concepts

EU Taxonomy: The European Union's classification system establishing criteria for environmentally sustainable economic activities. Under delegated regulations, activities must make a substantial contribution to at least one of six environmental objectives—climate change mitigation, climate change adaptation, sustainable use of water resources, transition to a circular economy, pollution prevention, and protection of biodiversity—while doing no significant harm to the others. For UK companies, Taxonomy alignment signals credibility to EU investors and trading partners.

Corporate Sustainability Reporting Directive (CSRD): The EU directive replacing the Non-Financial Reporting Directive, requiring companies to report according to European Sustainability Reporting Standards (ESRS). While UK-domiciled companies are not directly subject to CSRD, UK subsidiaries of in-scope EU companies must provide data for consolidated group reporting. Approximately 1,800 UK companies are estimated to face indirect CSRD obligations through parent company requirements.

Unit Economics of Certification: The granular cost-benefit analysis of pursuing specific certifications, encompassing direct expenses (audit fees, consultancy, internal labour), indirect costs (system implementations, process modifications), and quantifiable returns (premium pricing, contract access, cost of capital improvements). Practitioners increasingly apply net present value calculations to certification decisions, with payback periods ranging from 18 months to five years depending on sector and certification type.

SEC Climate Rules: The U.S. Securities and Exchange Commission's climate disclosure requirements, finalised in March 2024, mandating that registrants disclose climate-related risks, greenhouse gas emissions, and climate-related targets. While primarily affecting U.S.-listed companies, the rules impact UK firms with American Depositary Receipts or significant U.S. investor bases, creating additional certification and verification demands.

Compliance Assurance: The process of obtaining third-party verification that sustainability disclosures and certifications meet specified standards. Under CSRD, sustainability reports require limited assurance from 2024, moving to reasonable assurance by 2028. UK auditors are developing capacity to provide such assurance, with the Big Four accounting firms investing heavily in sustainability assurance practices.

What's Working and What Isn't

What's Working

Integrated Management System Approaches: Organisations adopting unified management systems that address multiple certification requirements simultaneously report significant efficiency gains. Practitioners highlight that combining ISO 14001 (environmental management), ISO 50001 (energy management), and ISO 45001 (occupational health and safety) into integrated frameworks reduces audit burden by approximately 40% and consultancy costs by 30%. "We stopped treating each standard as a separate project," notes James Crawford, Operations Director at a UK manufacturing firm. "Once we built an integrated system architecture, adding new certifications became incremental rather than transformational."

Supply Chain Certification Cascades: Leading UK retailers and manufacturers are successfully leveraging their market position to drive certification adoption throughout supply chains. Tesco's Supplier Sustainability Programme, launched in 2023, requires Tier 1 suppliers to achieve specified certifications within defined timelines, with compliance linked to contract renewals. By late 2024, 89% of targeted suppliers had achieved certification, demonstrating that commercial incentives can overcome traditional adoption barriers. The model creates positive unit economics for suppliers through preferential payment terms and volume commitments.

Technology-Enabled Continuous Certification: The shift from annual audit cycles to continuous monitoring and real-time certification maintenance is proving transformative for early adopters. Platforms integrating IoT sensors, automated data collection, and AI-powered anomaly detection reduce the cost of certification maintenance by 50-60% while improving compliance reliability. "The annual scramble before audits has disappeared," reports Emma Thompson, Sustainability Manager at a UK utilities company. "Our systems continuously demonstrate compliance, and auditors can access evidence in real-time."

Collaborative Industry Schemes: Sector-specific certification schemes developed through industry collaboration are achieving higher adoption rates than generic alternatives. The UK Plastics Pact, coordinated by WRAP, provides certification for circular economy commitments with shared infrastructure costs distributed across participants. Similarly, the Science Based Targets initiative (SBTi) validation process benefits from standardised methodologies that reduce individual company costs while maintaining credibility.

What Isn't Working

Certification Proliferation and Fragmentation: The explosive growth in sustainability certifications—the Ecolabel Index now tracks over 450 labels across 199 countries—creates confusion, duplication, and escalating costs. UK companies report pursuing an average of 7.3 sustainability certifications simultaneously, with limited evidence of proportional returns. "We're spending £800,000 annually on certifications, but I couldn't tell you which ones actually move the needle commercially," admits a sustainability director at a FTSE 100 company. The absence of mutual recognition agreements between certification bodies compounds the problem.

SME Accessibility Barriers: While certification requirements increasingly cascade to smaller suppliers, the cost structures of major certification schemes remain prohibitive for SMEs. A mid-tier environmental certification typically costs £15,000-£25,000 in direct audit and consultancy fees, with internal labour costs doubling that figure. For companies with turnover below £5 million, these costs represent a material barrier. "We're being asked for certifications that would consume 5% of our operating margin," notes a manufacturing SME owner. "The economics simply don't work for companies our size."

Lag Between Regulatory Evolution and Certification Alignment: Certification schemes struggle to keep pace with rapidly evolving regulatory requirements. Companies that invested heavily in certifications aligned with previous regulatory frameworks—such as the EU's original sustainable finance taxonomy—faced stranded costs when regulations evolved. The transition from voluntary to mandatory ESG disclosure has left some certification holders with credentials that no longer satisfy regulatory requirements, necessitating additional investment.

Greenwashing Concerns Undermining Credibility: High-profile cases of certified companies subsequently revealed to have poor sustainability performance have eroded trust in certification systems generally. Research from the University of Cambridge found that 34% of UK investors express scepticism about the reliability of third-party sustainability certifications. "Every scandal involving a certified company damages the entire ecosystem," observes Dr. Michael Chen, sustainability assurance partner at a major accounting firm. "We need more rigorous verification and meaningful consequences for misleading certifications."

Key Players

Established Leaders

British Standards Institution (BSI): The UK's national standards body and a leading global certification provider, BSI offers certifications spanning environmental management, energy efficiency, and sustainability reporting. With over 84,000 certified clients worldwide, BSI's Kitemark and ISO certification services remain foundational to UK corporate sustainability strategies.

Lloyd's Register: A heritage classification society now operating as a major sustainability certification body, Lloyd's Register provides third-party assurance across maritime, energy, and industrial sectors. Their verification services for carbon neutrality claims and supply chain sustainability have become industry benchmarks.

SGS SA: The Swiss-headquartered inspection and certification company maintains significant UK operations, providing sustainability certifications across agriculture, manufacturing, and consumer goods. SGS's global network enables multi-site certifications for multinational corporations.

Bureau Veritas: A global leader in testing, inspection, and certification services, Bureau Veritas offers comprehensive sustainability certification programmes including BREEAM assessments, carbon footprint verification, and supply chain audits across UK operations.

LRQA (formerly Lloyd's Register Quality Assurance): Specialising in management systems certification and sustainability assurance, LRQA provides ESG verification, supply chain assessments, and CSRD-aligned reporting assurance to UK companies navigating evolving disclosure requirements.

Emerging Startups

Ecologi: A Bristol-based climate action platform enabling businesses to achieve certified carbon neutrality through verified offset programmes and carbon footprint tracking, Ecologi has certified over 20,000 businesses since 2019.

Normative: A carbon accounting platform providing automated emissions calculations aligned with GHG Protocol standards, Normative enables SMEs to achieve carbon certification at significantly reduced costs through technology-driven efficiency.

Worldly (formerly Higg): Providing sustainability measurement and certification for apparel and footwear supply chains, Worldly's platform enables UK fashion brands to achieve verified sustainability credentials across complex global value chains.

Carbonchain: A UK-founded commodity emissions tracking platform, Carbonchain provides certification-grade emissions data for traded commodities, enabling banks and traders to meet green finance requirements.

Supercritical: A London-based carbon removal company providing certified carbon removal credits through direct air capture and other permanent removal technologies, Supercritical offers science-based certification for corporate net-zero claims.

Key Investors & Funders

UK Infrastructure Bank: The government-backed institution requiring sustainability certifications for project finance, UKIB has deployed £3.8 billion in sustainable infrastructure investments with embedded certification requirements.

Aviva Investors: A major institutional investor with £227 billion in assets under management, Aviva requires portfolio companies to maintain specified sustainability certifications as part of its Climate Engagement Escalation Programme.

Legal & General Investment Management (LGIM): One of Europe's largest asset managers, LGIM's Climate Impact Pledge ties voting and engagement activities to corporate sustainability certification status, influencing certification adoption across UK public companies.

Innovate UK: The government's innovation agency provides grant funding supporting sustainability certification adoption among SMEs, with targeted programmes addressing certification cost barriers.

The Ecology Building Society: A specialist mutual providing mortgages and business lending exclusively for sustainable properties and enterprises, Ecology requires stringent environmental certifications as lending criteria, creating certification demand within the sustainable construction sector.

Examples

Example 1: Rolls-Royce's Integrated Sustainability Certification Programme

Rolls-Royce implemented a comprehensive sustainability certification strategy across its UK manufacturing operations, achieving ISO 14001, ISO 50001, and EMAS registrations under a unified management system. The programme reduced certification-related costs by £2.1 million annually compared to managing separate certification streams. By 2024, the integrated approach enabled Rolls-Royce to demonstrate EU Taxonomy alignment for 43% of its civil aerospace revenues, facilitating access to €500 million in sustainability-linked financing at 25 basis points below conventional rates.

Example 2: Sainsbury's Supplier Certification Cascade

Sainsbury's launched its Supplier Sustainability Certification Programme in 2023, requiring fresh produce suppliers to achieve LEAF Marque or equivalent environmental certifications within 24 months. The retailer provided certification cost subsidies of up to £5,000 per supplier and offered technical assistance through partnership with ADAS. By late 2024, 94% of targeted suppliers achieved certification, with participating farms reporting average yield improvements of 8% through improved practices. The programme demonstrated that certification cascades can generate positive returns across supply chains when appropriately supported.

Example 3: The Crown Estate's BREEAM Outstanding Portfolio

The Crown Estate committed to achieving BREEAM Outstanding certification across its £16 billion commercial property portfolio, investing £340 million in sustainability upgrades between 2022 and 2025. The certification programme delivered measurable outcomes: 41% reduction in operational carbon emissions, 12% premium on certified asset valuations, and 97% tenant retention rates compared to 82% for uncertified comparable properties. The unit economics proved compelling, with certification investments generating 8.2% annualised returns through rental premiums and asset value appreciation.

Action Checklist

• Conduct a comprehensive audit of current certification portfolio, mapping each certification to specific commercial benefits (contract access, pricing premiums, capital cost reductions) to establish baseline unit economics
• Identify certification redundancies and consolidation opportunities by cross-referencing requirements across your current certification suite
• Develop a forward-looking certification roadmap aligned with anticipated regulatory requirements, particularly CSRD indirect obligations and UK SDR evolution
• Evaluate integrated management system architectures that address multiple certification requirements through unified processes and documentation
• Assess technology platforms for continuous certification maintenance, calculating ROI against traditional annual audit approaches
• Establish supply chain certification requirements with appropriate lead times, support mechanisms, and commercial incentives to drive adoption
• Engage certification bodies early regarding CSRD assurance capabilities and transition pathways from limited to reasonable assurance
• Develop internal competencies for certification management to reduce dependence on external consultancy and build institutional knowledge
• Create certification governance structures assigning clear ownership, budgetary responsibility, and performance metrics
• Establish a certification horizon-scanning function to monitor emerging standards and regulatory developments that may affect strategic certification decisions

FAQ

Q: How should UK companies approach EU Taxonomy alignment given post-Brexit regulatory divergence?

A: Despite Brexit, EU Taxonomy alignment remains commercially relevant for UK companies through three pathways: subsidiaries of EU parent companies must provide Taxonomy-aligned data for consolidated CSRD reporting; companies accessing EU capital markets or seeking EU investor capital benefit from Taxonomy alignment as a credibility signal; and supply chain relationships with EU counterparties increasingly incorporate Taxonomy-aligned procurement preferences. Practitioners recommend conducting Taxonomy eligibility assessments to identify which activities could qualify, then prioritising alignment investments based on commercial exposure to EU markets and investors. The UK's developing green taxonomy—expected to diverge from the EU version—will require parallel tracking once finalised.

Q: What is the realistic payback period for major sustainability certifications?

A: Payback periods vary significantly by certification type and company context. ISO 14001 environmental management certification typically achieves payback within 18-24 months through operational efficiencies, insurance premium reductions, and contract access. More demanding certifications like BREEAM Outstanding for buildings show payback periods of 4-7 years but deliver returns through asset value premiums and rental uplifts. Carbon neutrality certifications present more variable economics, with payback dependent on ability to command green premiums or access sustainability-linked finance. Practitioners emphasise that unit economics calculations should include indirect benefits—reduced customer acquisition costs, improved employee retention, and enhanced regulatory relationships—that traditional ROI models may undervalue.

Q: How can SMEs access certifications when cost structures favour larger organisations?

A: Several approaches are improving SME accessibility. Group certification schemes allow multiple SMEs to share audit costs under collective certification, reducing per-company expenses by 40-60%. Technology platforms like Normative and Ecologi provide automated certification pathways at fraction of traditional consultancy costs. Government support through Innovate UK and local growth hubs offers grants specifically targeting SME certification barriers. Supply chain certification cascades often include customer-funded subsidies recognising that certification benefits flow to buying organisations. Industry associations increasingly offer certification support as member benefits. The most successful SMEs approach certification strategically, prioritising certifications demanded by their largest customers rather than pursuing comprehensive certification portfolios.

Q: What emerging standards should decision-makers monitor for 2025-2026?

A: Several developments warrant close attention. The ISSB standards (IFRS S1 and S2) are achieving rapid global adoption, with the UK expected to mandate disclosure alignment. The EU's incoming Corporate Sustainability Due Diligence Directive (CSDDD) will impose supply chain due diligence obligations affecting UK suppliers to EU companies. The Science Based Targets initiative is tightening requirements around net-zero claims, with stricter verification for carbon removal credits. The Task Force on Nature-related Financial Disclosures (TNFD) framework is gaining institutional investor support, suggesting nature-related certifications will grow in importance. Additionally, the UK's Transition Plan Taskforce recommendations will likely drive demand for certified transition planning capabilities.

Q: How should companies balance certification investments against direct sustainability spending?

A: Practitioners increasingly frame this as a false dichotomy, arguing that well-designed certification programmes drive substantive improvements rather than merely documenting them. The key is selecting certifications requiring genuine performance improvements (like BREEAM or Science Based Targets) rather than purely procedural compliance. Organisations should apply portfolio thinking, allocating certification budgets toward credentials that unlock capital for direct sustainability investments. The integration of certification with operational improvement—using certification frameworks to structure sustainability programmes—maximises value from both categories of spending. However, practitioners warn against certification-seeking behaviour disconnected from impact, recommending regular materiality assessments to ensure certification investments align with actual sustainability priorities.

Sources

• British Standards Institution (2024). "The State of Sustainability Certification in UK Business." BSI Annual Research Report.
• Financial Conduct Authority (2024). "Sustainability Disclosure Requirements (SDR) and investment labels." FCA Policy Statement PS23/16.
• European Commission (2023). "Corporate Sustainability Reporting Directive: Questions and Answers." Official Journal of the European Union.
• International Sustainability Standards Board (2023). "IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information."
• UK Green Finance Strategy (2023). "Mobilising Green Investment: 2023 Green Finance Strategy." HM Treasury.
• Crown Commercial Service (2024). "Sustainable Procurement in Government: Annual Review 2023-24."
• Science Based Targets initiative (2024). "Annual Progress Report: Corporate Climate Action."
• University of Cambridge Institute for Sustainability Leadership (2024). "Investor Confidence in Sustainability Certifications: A Quantitative Assessment."