A UK-endorsed framework aligned with global standards
The publication of UK Sustainability Reporting Standards (UK SRS) marks a significant moment in the UK’s journey towards a more coherent and internationally aligned sustainability reporting landscape. The standards are the UK-endorsed versions of the International Sustainability Standards Board’s (ISSB) IFRS Sustainability Disclosure Standards. As such, UK SRS are closely aligned with the global baseline but adapted in places to reflect the UK context (see below).
Their publication follows the government’s 2025 consultation on the draft standards, which sought feedback on the proposed UK-specific amendments and on how the ISSB Standards should be adopted for use in the UK. This work forms part of the government’s broader ambition to position the UK as a leader in sustainable finance, with UK SRS intended to provide a consistent, internationally-aligned basis for reporting sustainability-related risks and opportunities.
After considering feedback from the consultation, the government formally endorsed the two standards and, on 25 February 2026, issued UK SRS S1 General requirements for disclosure of sustainability-related information (UK SRS S1) and UK SRS S2 Climate-related disclosures (UK SRS S2) for voluntary use across the UK.
What the standards require
In keeping with the structure of the ISSB Standards, UK SRS S1 sets out the overarching requirements for reporting sustainability-related risks and opportunities, while UK SRS S2 focuses specifically on climate-related disclosures. Designed to be applied together, the two standards follow a four-pillar framework, requiring entities to provide disclosures about:
- Governance: the processes, controls and procedures the entity uses to monitor and manage sustainability-related risks and opportunities.
- Strategy: the approach the entity uses to manage relevant risks and opportunities.
- Risk management: the processes the entity uses to identify, assess, prioritise and monitor the risks and opportunities.
- Metrics and targets: the entity’s performance in relation to the risks and opportunities, including progress towards any targets the entity has set or is required to meet by law or regulation.
Those familiar with existing reporting frameworks based on the Taskforce on Climate-related Disclosures (TCFD) recommendations will recognise the same four-pillar approach. Together, these pillars aim to provide investors and other stakeholders with a clear, connected picture of how sustainability risks and opportunities shape a company’s short, medium and long-term prospects.
Mandatory reporting on the horizon for listed companies
While reporting in accordance with UK SRS is currently voluntary, the direction of travel points towards mandatory adoption, starting with certain listed companies. In February 2026, the Financial Conduct Authority (FCA) consulted on proposals to update its Listing Rules to require inscope listed companies to report in line with UK SRS. Acknowledging that companies are at different stages of readiness, the FCA proposed a comply-or-explain approach for Scope 3 emissions and for sustainability-related disclosures under UK SRS S1 beyond climate-related matters. If implemented, the revised rules would apply to reporting periods beginning on or after 1 January 2027.
For non-listed companies, any future requirements are likely to be considered within the broader context of the government’s Modernisation of Corporate Reporting programme, which is exploring how to update and streamline the UK’s wider corporate reporting framework. At this stage, it remains unclear which entities – if any – might ultimately fall within scope.
Interaction with existing requirements
The arrival of new sustainability standards inevitably raises questions about how these disclosures will sit alongside existing reporting obligations. While the government has signalled that a more comprehensive review will follow, it has already taken initial steps to reduce duplication.
Companies reporting under UK SRS S2 – whether voluntarily or under future FCA rules – may use those disclosures to meet their obligations under the Climate-related Financial Disclosure Regulations 2022, provided they satisfy the relevant requirements for the non-financial and sustainability information statement (CA 2006 s414CB (1)-(5)) and clearly state that UK SRS S2 has been applied.
However, companies that fall in scope of the Streamlined Energy Carbon Reporting (SECR) regulations must continue to disclose the information required by that framework, meaning some duplication will persist for now. The Department for Energy Security and Net Zero has indicated that it intends to review how UK SRS disclosures interact with SECR in the future, with the aim of reducing overlap where possible.
Key differences between UK SRS and the ISSB Standards
While UK SRS remain closely aligned with their international counterparts (IFRS S1 General requirements for Disclosure of Sustainability-related Financial Information (IFRS S1) and IFRS S2 Climate-related Disclosures (IFRS S2)), several targeted amendments have been made to reflect the UK’s regulatory context and policy priorities.
Strengthened integration with financial reporting
One notable change is the removal of the IFRS S1 transitional relief that allowed sustainability disclosures to be published after the financial statements in the first year of adoption. This aligns with the existing approach in the Climate-related Financial Disclosure Regulations 2022, which already require sustainability and financial information to be reported simultaneously. Retaining the relief would therefore have represented a step backwards and its removal reinforces its expectation that financial and sustainability reporting should be closely connected from the outset.
No fixed effective date
To avoid confusion with any potential future regulatory requirements, UK SRS do not specify an effective date. Instead, they are available for voluntary use immediately, with any mandatory application to be introduced later through legislation or regulation – such as future updates to the FCA Listing Rules.
Removal of time limits for certain transitional reliefs
The UK government has also taken a different approach to transitional reliefs. Two key reliefs – the reporting of Scope 3 emissions and the disclosure of sustainability-related information under UK SRS S1 beyond climate-related matters – no longer carry fixed time limits. Voluntary users may apply them indefinitely, with UK regulators then being able to decide their duration under any legislation or regulations that mandate reporting.
To provide certainty, the government has confirmed that entities may still claim compliance with UK SRS S2 while using these reliefs, provided they disclose that they have done so. However, entities reporting solely on climate matters cannot claim compliance with UK SRS S1.
New relief for financial institutions
Recognising the particular challenges faced by financial institutions, the UK has introduced an additional mechanism to allow these institutions to explain why they have not yet been able to comply with the financed emissions disclosure requirements in paragraph B59 of UK SRS S2. This includes outlining their approach to measuring financed emissions – such as using prior-year balance sheet data – and setting out how they plan to meet the full requirements over time.
Optional consideration of SASB Standards and S2 Industry-based Guidance
The UK framework also offers greater flexibility by making it optional, rather than mandatory, for preparers to consider the SASB sector-based standards and the ISSB’s S2 Industry-based Guidance. Entities may still draw on these materials where useful, but are not required to do so.
ISSB’s latest changes integrated
UK SRS S2 incorporates the ISSB’s recent targeted amendments to IFRS S2, issued in December 2025, bringing the UK standard fully up to date with the latest from the international standard setter. Among the changes are greater flexibility for entities to use classification systems beyond the Global Industry Classification Standard (GICS) when reporting financed emissions; the removal of certain Scope 3 categories – such as those linked to derivatives, facilitated emissions and insurance-related activities; and a broader suite of jurisdictional reliefs, including the option to apply alternative Global Warming Potential values or methodologies other than the GHG Protocol in specific circumstances. The only element not carried across relates to effective dates and transition, given the UK standards do not contain a specific effective date.
Next steps for companies
For companies that anticipate using the standards – whether voluntarily or not – the publication of the final UK SRS is a natural moment to pause and re-assess. Preparers will need to revisit the standards in their final form and compare them with both the exposure drafts and the underlying ISSB Standards, ensuring they understand where the UK-specific adjustments may affect work already underway.
Equally important will be keeping a close eye on the policy landscape. The direction of travel – shaped by the government’s Modernisation of Corporate Reporting Programme and the FCA’s proposed updates to the Listing Rules – will determine whether, and in what form, the UK SRS move from voluntary guidance to mandatory reporting requirements.
