The UK SRS: What businesses need to know about the UK’s new sustainability reporting framework

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For years, UK businesses have navigated a fragmented landscape of sustainability reporting obligations: SECR for energy and carbon, TCFD-aligned rules for listed companies, and voluntary frameworks like GRI or CDP on top. The result? Duplicated effort, inconsistent disclosures, and limited comparability for investors.

That era is drawing to a close. On 25 February 2026, the UK Department for Business and Trade officially published the UK Sustainability Reporting Standards (UK SRS S1 and UK SRS S2), marking the most significant shift in British corporate sustainability disclosure in years.

Though currently available on a voluntary basis, the road to mandatory adoption is clearly mapped out, and the clock is ticking for companies to get ready.

This guide is a deep dive into everything you need to know: what the standards require, who they affect, how they compare to existing frameworks, and what concrete steps your organisation should take now.

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1. What Are the UK SRS? The Origins of the Framework

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The UK SRS are the UK government's endorsed versions of the ISSB (International Sustainability Standards Board) standards, specifically IFRS S1 and IFRS S2, adapted with targeted amendments for the UK market.

The ISSB was established at COP26 in Glasgow in 2021, with the explicit mandate to create a globally consistent baseline for sustainability disclosures aimed at investors and capital markets. In 2023, the ISSB published its first two standards.

The UK's Technical Advisory Committee then spent two years assessing those standards, consulting with stakeholders, and proposing the modifications needed before endorsement.

The UK joins a growing international cohort, including Australia, Japan, Canada, Singapore, and Hong Kong, that has adopted ISSB-aligned reporting standards, creating a foundation for cross-border comparability that multinationals have long demanded.

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2.1 The Two Standards Explained

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2.1 UK SRS S1: General Requirements for Sustainability-related Financial Information

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UK SRS S1 establishes the overarching architecture for how companies disclose sustainability-related financial information.

Its core principle is financial materiality: companies must identify and report on sustainability-related risks and opportunities across all topics, not just climate, that could reasonably be expected to affect their cash flows, access to finance, or cost of capital.

In practice, a materiality assessment is the starting point. Companies must determine which sustainability topics (water, biodiversity, labour practices, supply chain, etc.) are material to their investors, not simply to society at large.

Disclosures must also be connected to financial statements, making sustainability information directly relevant to investment decisions. The four-pillar structure of Governance, Strategy, Risk Management, and Metrics & Targets applies across all sustainability topics, not just climate.

One important nuance: companies that report exclusively on climate under UK SRS S2 cannot claim compliance with UK SRS S1. The two standards are designed to be used together, with S1 providing the general framework and S2 going deep on climate.

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2.2 UK SRS S2: Climate-related Disclosures

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UK SRS S2 is where the most concrete and technically demanding requirements sit. It directly builds on the TCFD framework, which was formally superseded when the ISSB standards were published, but goes considerably further in depth and specificity.

The standard is structured around the same four pillars inherited from TCFD, but each one carries significantly more granular expectations.

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Pillar 1: Governance

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Companies must disclose the governance processes, controls, and procedures used to monitor and manage climate-related risks and opportunities. This goes beyond simply naming a board committee.

It requires demonstrating how climate considerations are actively integrated into decision-making, and whether executive remuneration is linked to climate performance targets.

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Pillar 2: Strategy

This is the area where UK SRS S2 most clearly raises the bar. Companies must articulate how climate-related risks and opportunities, both physical risks (flooding, heat stress, supply chain disruption) and transition risks (carbon pricing, regulatory change, shifting consumer preferences), affect their business model and financial planning across short, medium, and long time horizons.

A key requirement is climate scenario analysis. Unlike some predecessor frameworks, UK SRS S2 does not prescribe specific scenarios for companies to use.

This gives organisations methodological flexibility but also responsibility: the choice of scenarios must be justified, and the analysis must be genuinely rigorous rather than a box-ticking exercise.

On transition planning, the standard takes a pragmatic position. It does not require all companies to have a formal transition plan in place. However, it does require every company to disclose how it has responded to, and plans to respond to, climate-related risks and opportunities in its strategy and decision-making.

Companies without a formal plan must therefore still demonstrate coherent strategic thinking about climate.

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Pillar 3: Risk Management

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Companies must describe their processes for identifying, assessing, prioritising, and monitoring climate-related risks.

Crucially, UK SRS S2 requires consideration of climate-related opportunities as well as risks, calling for a more balanced, forward-looking view of climate's impact on business performance.

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Pillar 4: Metrics and Targets

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This pillar contains the most operationally intensive requirements.

GHG emissions reporting

Companies must disclose Scope 1 (direct emissions) and Scope 2 (purchased energy) emissions. These are mandatory requirements under both the FCA's current proposals and the full UK SRS S2 framework.
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Scope 3 emissions

UK SRS S2 formally requires Scope 3 reporting (indirect value chain emissions), but entities reporting voluntarily may use a relief to opt out, provided they explicitly disclose that they are doing so, identify the specific paragraphs where they have not produced Scope 3 disclosures, and explain their reasons.

The FCA has proposed implementing Scope 3 under a comply-or-explain approach for mandatory reporters.

Targets

Companies must disclose the climate-related targets they use, the metrics applied to track progress, and the base year from which progress is measured.

Where a net zero commitment or science-based target exists, it must be disclosed with sufficient detail for investors to assess its credibility.

Methodology alignment

UK SRS S2 requires companies to use the latest IPCC assessment reports where possible when measuring GHG emissions, a methodology requirement absent from the TCFD framework and one that adds rigour to emissions quantification.

Financed emissions (financial institutions)

For banks, insurers, and asset managers, UK SRS S2 introduces specific requirements around financed emissions. Where a financial institution determines it is impracticable to estimate financed emissions reliably, it must explain the reasons, describe its measurement approach, and set out plans to meet the full requirements in future.

Institutions may also report financed emissions for a different reporting period to that used for financial statements, where same-period reporting is not practicable.

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3. Who Is Affected and What Are the Key Dates?

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As of 25 February 2026, the UK SRS are available for voluntary use by any entity, listed or private, large or small. There is no obligation to adopt them today. The trajectory toward mandatory adoption is, however, clearly signposted.

In January 2026, the FCA published consultation CP26/5, proposing changes to the UK Listing Rules that would require in-scope listed companies to report against UK SRS. The consultation closed on 20 March 2026.

Companies in scope include those in the commercial companies, transition, non-equity shares, and non-voting equity shares listing categories on UK markets. For international companies with a primary listing outside the UK, the FCA is proposing a lighter-touch approach.

In autumn 2026, the FCA is expected to publish its final rules and policy statement. The proposed effective date for mandatory UK SRS S2 reporting for in-scope listed companies is 1 January 2027, covering reporting periods beginning on or after that date.

Beyond listed companies, the government has indicated it will explore extending UK SRS requirements to private companies through the broader Modernisation of Corporate Reporting programme. No timeline has been confirmed for this step.

On assurance, the Financial Reporting Council has been asked to establish an interim register of sustainability assurance practitioners by mid-2026.

The relevant assurance standard, ISSA (UK) 5000, will be effective for sustainability information reported for periods beginning on or after 15 December 2026.

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4. Key Differences from the Standards You Already Know

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UK SRS vs. TCFD

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UK SRS S2 is explicitly buil on the TCFD architecture, so the structural transition should be manageable for organisations that have been reporting under TCFD. The key differences lie in depth and specificity: TCFD provided a framework; UK SRS S2 prescribes what must be disclosed within that framework.

Companies with mature TCFD disclosures will find the biggest gaps in the quantification of financial effects, the rigour of scenario analysis, Scope 3 reporting, and connectivity to financial statements.

UK SRS vs. CSRD

For organisations operating in both the UK and EU, the interaction between UK SRS and the EU's Corporate Sustainability Reporting Directive (CSRD) is a practical consideration.

The fundamental difference lies in materiality philosophy: CSRD uses a double materiality approach, requiring disclosure of both financial impacts on the company and the company's impacts on people and the planet.

UK SRS adopts a single, financial materiality approach focused on information relevant to investors. UK SRS-compliant reporting will not automatically satisfy CSRD obligations, and vice versa, though there is meaningful overlap particularly on climate.

UK SRS and SECR: Coexistence, Not Replacement

An important practical point: companies currently subject to Streamlined Energy and Carbon Reporting (SECR) obligations must continue to comply with SECR even if they adopt UK SRS.

The two frameworks currently coexist, meaning some duplication in energy and emissions reporting will persist.

The Department for Energy Security and Net Zero has confirmed it intends to review how UK SRS-based disclosures interact with SECR with a view to reducing overlap in future, but no timeline has been set.

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5. Reliefs and Transitional Provisions: What Flexibility Exists?

The UK government has taken a pragmatic approach to transitional provisions, recognising that organisations are at different stages of readiness.

On non-climate sustainability disclosures (UK SRS S1 beyond climate), companies can phase in disclosures on non-climate topics after climate-related ones. Voluntary users may apply this relief indefinitely; the FCA has proposed a two-year transitional relief for mandatory reporters.

On Scope 3 emissions, companies may opt out under a relief, but must explicitly disclose their use of it, identify the specific paragraphs they have not complied with, and explain why.

Entities using this relief can still assert compliance with UK SRS S2. Voluntary users may apply this relief indefinitely; the FCA has proposed a one-year transitional relief for mandatory reporters.

On timing of disclosures, the exposure draft had included a relief allowing entities to publish sustainability disclosures later than financial statements in their first year of reporting.

This relief was removed in the final standards to ensure alignment and connectivity between sustainability and financial information.

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6. What Your Organisation Should Be Doing Now

Whether mandatory reporting applies to your organisation in 2027 or further down the line, the window for preparation is now.

The first step is to understand your current baseline: map your existing disclosures against the UK SRS S1 and S2 requirements. The gap between current practice and full UK SRS compliance is the starting point for your work plan.

The second priority is Scope 3. For most organisations, Scope 3 emissions represent the largest data gap and the most resource-intensive area to address.

Starting data collection and supplier engagement now, before mandatory requirements apply, is the single most impactful preparatory action.

Third, strengthen scenario analysis. If your TCFD disclosures included scenario analysis, assess whether they meet the depth and rigour expected under UK SRS S2. If you have not yet conducted scenario analysis, this is the time to build that capability.

Fourth, connect sustainability to finance. UK SRS S2 requires disclosures to be connected to financial statements, quantifying the anticipated financial effects of climate risks and opportunities. This typically requires closer collaboration between sustainability teams and finance functions.

Finally, consider voluntary early adoption. Organisations that adopt UK SRS voluntarily ahead of mandatory requirements gain a credibility advantage with investors and commercial partners, and avoid last-minute compliance pressure. Stay close to the FCA's final rules, expected in autumn 2026, which will define the precise scope and requirements for listed companies.

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Conclusion

The UK Sustainability Reporting Standards represent a genuine step change in the ambition and consistency of corporate climate disclosure in Britain. By anchoring to the ISSB baseline, the UK has positioned itself within a growing global consensus, giving investors the comparability they need and giving companies a single, coherent framework to work toward.

The voluntary phase is not a pause. It is an invitation to get ahead. For sustainability and climate teams, the question is not whether to prepare, but how quickly.

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