UK government endorses UK sustainability reporting standards

What does this mean?

The publication of the final UK SRS completes the UK’s endorsement process and makes the standards available for voluntary use. There was broad support for endorsement, subject to amendments (88% of respondents). Feedback was focused on operability and on how the UK SRS will be implemented through future UK requirements. 

Key feedback themes included:

• The benefits of a global baseline included improved consistency and comparability, better transparency for users, and stronger connectivity between sustainability reporting and financial risk reporting.

• Respondents’ main cost drivers were implementation or upgrades to data systems and the effort of sourcing and providing data. Scope 3 greenhouse gas (GHG) emissions were often described as particularly costly, alongside the cost of materiality assessments.

• Many respondents flagged that the costs of assurance could be substantial, particularly if assurance becomes mandatory, and noted the internal preparation effort required.

• Respondents identified a need for practical guidance and examples, including on scenario analysis and materiality judgements (e.g. applying materiality to Scope 3 GHG emissions).

• The potential burden on small and medium-sized enterprises (SMEs) was highlighted; suggested mitigations included training, capacity building, or clearer boundaries on data requests to smaller entities.

• Interoperability and streamlining across UK and EU regimes were also raised, particularly how UK SRS should align with existing requirements and help reduce duplication. E.g. for Streamlined Energy and Carbon Reporting (SECR), Task Force on Climate-related Financial Disclosures (TCFD)-aligned reporting, and the Energy Savings Opportunity Scheme (ESOS). Respondents highlighted the need for mapping/cross-referencing and parent-level reporting to reduce overlap and fragmentation. They also frequently cited the impact of the EU Corporate Sustainability Reporting Directive, noting that interoperability is particularly important for dual reporters.

• Respondents asked for clarity on whether and when reporting would become mandatory, noting that investment in skills and systems depends on regulatory certainty. Some also suggested a period of voluntary reporting to help develop good practice.
• The majority view was that Companies Act section 463 provides a broadly adequate liability framework for directors’ statements in the Strategic Report, provided the government clarifies its application to UK SRS reporting – particularly for forward-looking disclosures and those based on estimates or third-party data. Some respondents also noted the FCA’s provisions on forward-looking statements, which took effect in January 2026.

Comparing UK SRS vs. the ISSB standards

The final UK SRS remain closely aligned to the ISSB baseline. However, the government has confirmed a set of targeted amendments, reflecting consultation feedback and the need to avoid confusion as UK reporting requirements are introduced. These are summarised below.

Removal of specific time references for certain reliefs

UK SRS removes specific time references in UK SRS S1 and UK SRS S2 for reliefs related to non-climate reporting and Scope 3 emissions reporting. As a result, voluntary adopters may use these reliefs indefinitely, while their application for mandatory reporters will depend on any future legal or regulatory requirements (e.g. under the Companies Act, FCA Listing Rules, or other authorities mandating the standards).

No changes were made to the relief in UK SRS S2 allowing the use of a method other than the GHG Protocol to measure emissions in the first year.

Additionally, the final standards clarify the use of compliance statements: 

• an entity may assert compliance with UK SRS S2 so long as it discloses its use of the reliefs as referred to in the text; and

• if an entity uses the relief to report exclusively on climate-related risks and opportunities, it may not assert compliance with UK SRS S1.

Removal of first-year reporting timing relief

The UK SRS removes the transition relief in IFRS S1 that allowed reporting entities to publish their sustainability-related information at a different time to the financial statements in the first year of reporting.

Removal of ‘effective date’ clauses from UK SRS

The ‘effective date’ clauses have been removed from the UK SRS. Instead, effective dates will be determined by the relevant regulation or legislation, such as the FCA’s Listing Rules or the UK Companies Act requirements.

ISSB targeted amendments to IFRS S2 (December 2025) are carried across into UK SRS S2

The government incorporated the ISSB’s targeted amendments to IFRS S2 within UK SRS S2, including:

• removing the requirement to use the Global Industry Classification Standard and permitting alternative classification systems for financed emissions disclosures;

• excluding Scope 3 emissions associated with derivatives, facilitated emissions and insurance-associated emissions from Scope 3 reporting requirements;

• extending and clarifying certain jurisdictional reliefs (Global Warming Potential values and methodology other than the GHG Protocol).

However, the ISSB’s additional “effective date and transition” amendments were not carried across as the UK SRS do not contain an effective date.

Introduction of new ‘explain’ mechanism for financed emissions

UK SRS S2 adds a mechanism for financial institutions to explain why they have not been able to comply with the financed emissions disclosure requirements if that is the case. This includes an explanation of the measurement approach taken (including use of a prior balance sheet) and how the entity plans to meet the full requirements in future.

Optional use of Sustainability Accounting Standards Board (SASB) Standards

The final standards retain the proposed amendment from “shall” to “may” when referring to the SASB Standards and the Industry-based Guidance on Implementing IFRS S2. Companies are therefore still expected to disclose industry-relevant metrics but are not required to use the SASB-based guidance.

What do firms need to do?

Firms should review the final UK SRS against the exposure drafts and assess what changes are required to any work already completed. Existing gap analyses, design decisions and project plans should be tested against the final text to confirm whether conclusions change.

Where technical groundwork has not yet been completed, firms should consider undertaking a gap assessment against UK SRS S2 (including data availability and controls readiness) and performing a materiality assessment. Firms also need to decide which industry standards or other sources will be used to identify potentially material disclosures.

Firms should monitor developments that will determine whether and how UK SRS becomes mandatory, including the government’s MCR programme and the FCA’s consultation on Listing Rule changes. MCR may also present opportunities over time to streamline UK reporting requirements and reduce duplication across regimes (e.g. SECR, TCFD-aligned reporting and ESOS).

Firms likely to fall within scope may wish to take proportionate preparatory steps ahead of any mandate, including establishing governance and reporting structures and running internal dry runs. Testing the end-to-end operating model (data, controls, narrative and sign-off) can help identify gaps, build readiness and mitigate the risk of a compressed implementation timeline.

In considering possible public early adoption, firms should take account of the wider regulatory context, including how timing may affect the availability and use of transitional reliefs.

Banks and insurers implementing the PRA’s SS5/25 should also consider the interaction with UK SRS when developing their approach to climate-related disclosures.

Next steps

The UK SRS are available immediately for voluntary use, although their use is expected to be mandated for certain UK companies through regulation and/or legislation over time:

• Government will consult “shortly” on modernising the UK’s corporate reporting requirements. This program of work will include whether to require private companies to report using UK SRS. Additionally, the government will update its guidance on climate-related financial disclosures for companies and LLPs.

• The FCA’s consultation on updating Listing Rules to reference UK SRS ends 20 March 2026, with an expected application date of 1 January 2027. 

The Department for Energy Security and Net Zero (DESNZ) will publish a summary of feedback to its transition plan requirements consultation in due course. It will also consider how UK SRS-based energy and emissions reporting interacts with SECR, with a view to reducing duplication.