UK Sustainability Reporting Standards (UK SRS)

Navigating the UK's New Era of Sustainability Reporting

Are you ready to embrace the UK's evolving landscape of sustainability reporting?

The UK Sustainability Reporting Standards (UK SRS) S1 and S2 have been finalised for voluntary use, marking a significant step towards a consistent and comparable framework for sustainability reporting and disclosures in the UK.

These standards are based on the International Sustainability Standards Board (ISSB)’s inaugural IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climate-related Disclosures). While retaining the core principles of international comparability, the UK SRS incorporate minor amendments to ensure their effective application within the UK context.

This development provides crucial clarity for companies and investors, focusing on financially material information to meet the needs of capital markets and supporting robust sustainability assurance.

Who Does UK SRS Affect?

Initially, the UK Sustainability Reporting Standards are available for voluntary use by any UK entity wishing to enhance their sustainability reporting and disclosures. Looking ahead, the mandatory application scope for UK Sustainability Reporting Standards is becoming clearer:

Listed Entities

Non-listed Entities

Regulatory Outlook

The journey towards mandatory UK Sustainability Reporting Standards reporting is well underway. The Financial Conduct Authority (FCA) is currently consulting on proposed amendments to the UK Listing Rules, which would mandate certain listed companies to report under UK SRS, replacing the existing TCFD reporting requirements.

These proposals suggest an effective date for periods beginning on or after 1 January 2027, with early adoption permitted. The scope aligns with current TCFD rules, requiring mandatory climate-related disclosures (excluding Scope 3 GHG emissions), with Scope 3 GHG emissions and non-climate sustainability disclosures (under UK SRS S1) subject to comply or explain requirements for non-climate sustainability disclosures UK SRS.

Furthermore, companies will need to disclose details of any third-party assurance obtained and whether a climate-related transition plan has been published. For non-listed entities, the government is expected to consult on future requirements later this year.

Preparing for UK SRS: Key Actions for Businesses

As the UK Sustainability Reporting Standards become a cornerstone of corporate reporting, proactive preparation is key. Preparing for UK SRS: Key actions for businesses include:

Preparing for UK SRS: Key Actions for Businesses

As the UK Sustainability Reporting Standards become a cornerstone...

Familiarising yourselves with the specifics of UK SRS S1 and S2, understanding their implications for your entity especially with regards the application of financial materiality and the connectivity with the financial statements.
Assessing your current sustainability reporting practices, particularly if you are already reporting under TCFD, to identify gaps and areas for alignment with UK SRS.
Planning for the potential mandatory application, especially if your entity falls within the scope of the FCA’s proposals, considering the 1 January 2027 effective date.
Evaluating the benefits of early voluntary adoption of UK SRS, including gaining experience and refining your sustainability reporting processes.
Developing robust strategies for addressing Scope 3 GHG emissions under UK SRS and broader non-climate sustainability disclosures, preparing for the comply or explain requirements.
Considering the need for third-party assurance and ensuring your climate-related transition plans are well-defined and ready for disclosure.

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UK Sustainability Reporting Standards (UK SRS)

Navigating the UK's New Era of Sustainability Reporting