UK government publishes its Sustainability Reporting Standards
The UK Government has published its finalised Sustainability and Reporting Standards (SRS) setting out a clear framework for corporate sustainability disclosures. Known as UK SRS S1 and UK SRS S2, the regulations are based on guidance developed by the International Sustainability Standards Board (ISSB) and follow a consultation held last year. In addition, the SRS standards align with IFRS Foundation standards IFRS S1 and IFRS S2[i].
In summary the two new standards cover the following:
· The UK SRS S1 sets out the general requirements for sustainability-related financial disclosures, requiring companies to report on sustainability risks and opportunities.
· The UK SRS S2 focuses specifically on climate-related disclosures, covering both physical risks and transition-related risks.
Companies aligning with S1 and S2 are required to provide information to cover governance, strategy, risk management, metrics, and targets. The documents state that companies must publish sustainability disclosures at the same time as their financial statements and cover the same reporting period.
Commenting on the publication of the finalised SRS, UK Sustainable Investment and Finance Association (UKSIF) CEO James Alexander said: “We welcome confirmation of the decision to closely align this framework with the International Sustainability Standards Board’s (ISSB) standards, which can help reinforce the UK’s global competitiveness. We look forward to policymakers now focusing on delivery through the Modernising Corporate Reporting (MCR) programme and wider initiatives.”[ii]
What it means for businesses
At present the Sustainability and Reporting Standards are voluntary, however the government and the Financial Conduct Authority (FCA) will consider whether to introduce requirements for certain UK entities to report against these standards.
The FCA is currently consulting on proposals to amend the rules for UK-listed companies, with this consultation open until the 20th March 2026. If implemented, it would replace current listing rules aligned with the Task Force on Climate-related Financial Disclosures (TCFD). The Government has also indicated that it intends to consult on extending the standards to large private companies, although thresholds and timelines have not yet been confirmed.
The publication of the new standards provides clarity following the release of the exposure draft last year and gives companies a definitive framework for voluntary adoption. Further, a key aspect of the UK SRS is interoperability- being closely aligned with the ISSB means that those companies which adopt the UK SRS should find it easier to provide information that is consistent with other major international frameworks.
UKSIF CEO, James Alexander, adds that the association wants “to see greater clarity on how the standards can become mandatory for in-scope companies through this process. An efficient transition from TCFD-aligned to SRS-aligned reporting for companies over the coming years will bring tangible benefits to both investors and reporting organisations.”[iii]
References
[i] UK Sustainability Reporting Standards - GOV.UK
[ii] STATEMENT: UK Sustainability Reporting Standards (SRS) ‘An Important Step Forward’ – UKSIF
[iii] STATEMENT: UK Sustainability Reporting Standards (SRS) ‘An Important Step Forward’ – UKSIF
