UK Sustainability Reporting Standards (UK SRS) 2026: What Every Business Needs to Know
A complete guide to UK SRS S1, UK SRS S2, mandatory timelines, and how to prepare
On 25 February 2026, the UK government published the finalised UK Sustainability Reporting Standards (UK SRS)[reference:0]. These standards—UK SRS S1 and UK SRS S2—represent the UK-endorsed versions of the International Sustainability Standards Board’s (ISSB) IFRS Sustainability Disclosure Standards[reference:1]. While currently voluntary, they are set to become mandatory for listed companies from 1 January 2027, with large private entities following in 2028[reference:2]. This guide explains everything you need to know.
What Are UK Sustainability Reporting Standards (UK SRS)?
UK SRS are sustainability disclosure standards issued by the UK government for voluntary use in the UK[reference:3]. They consist of two core standards[reference:4]:
- UK SRS S1 – General Requirements for Disclosure of Sustainability-related Financial Information[reference:5]
- UK SRS S2 – Climate-related Disclosures[reference:6]
These standards are the UK-endorsed versions of the ISSB’s IFRS Sustainability Disclosure Standards, with only six minor UK-specific amendments to ensure alignment with the UK’s legal and corporate reporting landscape[reference:7][reference:8]. They are designed to be applied together[reference:9] and are available for immediate voluntary use[reference:10].
The UK government has removed the “delayed reporting” relief found in the IFRS standards[reference:11]. This means sustainability disclosures must be published at the same time as annual financial statements and written for a reader of general-purpose financial reports[reference:12]. The sustainability and financial data must also align in content and meet the same standards of accuracy[reference:13].
UK SRS S1 vs UK SRS S2: What’s the Difference?
| Aspect | UK SRS S1 | UK SRS S2 |
|---|---|---|
| Focus | General sustainability-related risks and opportunities[reference:14] | Climate-related risks and opportunities[reference:15] |
| Framework | Overarching framework for sustainability disclosures[reference:16] | Detailed requirements for climate disclosures[reference:17] |
| Four Pillars | Governance, Strategy, Risk Management, Metrics & Targets[reference:18] | Same four pillars, applied to climate[reference:19] |
| Mandatory Timeline | Comply-or-explain from 2027; mandatory from 2029[reference:20] | Mandatory from 2027 (climate-first rule)[reference:21] |
The Four-Pillar Framework
Both UK SRS S1 and UK SRS S2 follow a four-pillar framework, providing investors with a clear, connected picture of how sustainability risks and opportunities shape a company’s prospects[reference:22]:
- Governance: The processes, controls and procedures used to monitor and manage sustainability-related risks and opportunities[reference:23]
- Strategy: The approach used to manage relevant risks and opportunities[reference:24]
- Risk Management: The processes used to identify, assess, prioritise and monitor risks and opportunities[reference:25]
- Metrics and Targets: Performance in relation to risks and opportunities, including progress towards targets[reference:26]
Who Needs to Comply? A Phased Rollout
The UK SRS implementation follows a clear phased timeline[reference:27]:
| Phase | Who It Applies To | Timeline | Requirements |
|---|---|---|---|
| Voluntary | Any UK entity (private or listed)[reference:28] | Available immediately | Voluntary adoption encouraged as best practice[reference:29] |
| First Mandatory Wave | Listed companies (certain listing categories)[reference:30] | Accounting periods from 1 January 2027[reference:31] | UK SRS S2 (climate) mandatory; UK SRS S1 comply-or-explain[reference:32] |
| Second Mandatory Wave | Large private entities meeting 2 of 3 metrics[reference:33] | Accounting periods from 1 January 2028[reference:34] | Full UK SRS S1 and S2 requirements[reference:35] |
Large Private Entity Thresholds (from 2028)[reference:36]
An entity qualifies as “large” if it meets at least two of the following three criteria:
- 250+ employees
- £54m+ turnover
- £27m+ balance sheet total
Which Listed Companies Are In Scope?
The FCA’s proposals apply to companies in specific listing categories[reference:37]:
- Commercial companies category (UKLR 6)[reference:38]
- Secondary listing category (UKLR 14)[reference:39]
- Depositary receipts category (UKLR 15)[reference:40]
- Non-equity shares and non-voting equity shares category (UKLR 16)[reference:41]
- Transition category (UKLR 22)[reference:42]
At this stage, there are no statutory size thresholds (turnover, employees, assets) for UK SRS reporting in legislation – scope for listed companies is determined by listing category[reference:43]. For private companies, the government has signalled intent to focus on “economically significant” entities[reference:44].
What Needs to Be Reported?
Under UK SRS S1 (General Sustainability)
Organisations need to disclose material information about sustainability-related risks and opportunities that could affect their prospects[reference:45]. Materiality refers to information that could reasonably be expected to influence the decisions of investors or lenders[reference:46]. The reporting is primarily narrative-driven but must be robustly supported by data[reference:47].
Under UK SRS S2 (Climate-Specific)
Companies must disclose information specifically about climate-related risks and opportunities[reference:48], including[reference:49]:
- Scope 1, 2, and 3 emissions – including the approach to calculation[reference:50]
- Expenditure on climate-related risks and opportunities – including carbon pricing[reference:51]
- Quantifiable impacts of climate-related transition risks, physical risks, and opportunities[reference:52]
- Climate transition plans – including assumptions and dependencies[reference:53]
- Climate scenario analysis – to test business resilience[reference:54]
- Executive remuneration – how climate considerations are factored in[reference:55]
Transitional Reliefs
The FCA has proposed transitional reliefs to help companies prepare[reference:56]:
- Scope 3 emissions: Comply-or-explain basis; optional 1-year deferral[reference:57]
- UK SRS S1 non-climate disclosures: Comply-or-explain basis; optional 2-year deferral[reference:58]
- Transition plan disclosures: No mandate, but statement required on whether and where a transition plan has been published[reference:59]
Key Timeline: From Voluntary to Mandatory
25 Feb 2026
UK SRS S1 and S2 published[reference:60]
20 Mar 2026
FCA consultation closes[reference:61]
Autumn 2026
FCA final rules expected[reference:62]
1 Jan 2027
Listed companies mandatory[reference:63]
1 Jan 2028
Large private entities mandatory[reference:64]
2028/29
Mandatory limited assurance expected[reference:65]
2030
Reasonable assurance targeted[reference:66]
Assurance: What to Expect
The UK government and the FCA have adopted a “transparency first” approach[reference:67]. From accounting periods starting 1 January 2027, in-scope companies must include a statement in their annual report declaring whether their sustainability disclosures have been independently assured[reference:68]. This is a “disclose or explain” requirement – companies must state their assurance status but are not yet legally forced to obtain it[reference:69].
- 2027: Disclose or explain assurance status[reference:70]
- 2028/29: Mandatory limited assurance[reference:71]
- 2030: Full reasonable assurance[reference:72]
While assurance is not yet mandatory, the market expectation for quality data is high[reference:73].
How UK SRS Compares to Other Frameworks
| Framework | UK SRS | TCFD (Replaced) | IFRS/ISSB |
|---|---|---|---|
| Status | UK-endorsed version of ISSB[reference:74] | Replaced by UK SRS S2[reference:75] | Global baseline[reference:76] |
| Scope | S1 (general) + S2 (climate)[reference:77] | Climate only | IFRS S1 + IFRS S2 |
| Materiality | Financial materiality[reference:78] | Financial materiality | Financial materiality |
| Connectivity | No delayed reporting relief[reference:79] | Allowed delayed reporting | Delayed reporting relief available |
How to Prepare Your Business
1. Gap Analysis
Identify gaps between current disclosures and UK SRS requirements[reference:80]
2. Build Data Capability
Establish systems to collect and verify sustainability data[reference:81]
3. Strengthen Governance
Ensure board oversight of sustainability[reference:82]
4. Engage Early
Consider responding to FCA consultation (if applicable)[reference:83]
5. Integrate Reporting
Align sustainability reporting with financial reporting[reference:84]
6. Consider Voluntary Adoption
Start reporting early to gain competitive advantage[reference:85]
- Competitive advantage: Companies that build clean datasets, clear governance, and strong controls will tell a clearer story to investors and customers[reference:86]
- Investor confidence: UK SRS aim to strengthen investor confidence and accelerate progress toward net-zero[reference:87]
- Risk reduction: Early adoption reduces the risk of last-minute compliance failures[reference:88]
- Cost efficiency: Building capability now is less expensive than rushing later[reference:89]
Companies that adopt UK SRS early will be better positioned to meet investor expectations, demonstrate leadership on sustainability, and avoid the scramble that comes with last-minute compliance. As one commentator noted: “Companies that build clean datasets, clear governance, and strong cyber controls will find reporting easier, and they will tell a clearer story to investors and customers”[reference:90].
Frequently Asked Questions
? Are UK SRS currently mandatory?
No. Reporting against UK SRS is not currently mandatory[reference:91]. However, they will form the foundation of future regulation if and when reporting requirements are introduced[reference:92].
? When do I need to start reporting?
This depends on your business type. Listed companies will report from accounting periods starting 1 January 2027[reference:93]. Large private entities (250+ employees, £54m+ turnover, or £27m+ balance sheet) will report from 1 January 2028[reference:94]. All other entities can adopt voluntarily now[reference:95].
? What’s the difference between UK SRS and TCFD?
UK SRS S2 replaces the TCFD recommendations[reference:96] with more granular requirements for reporting climate impacts[reference:97]. UK SRS S1 also introduces broader sustainability disclosures beyond climate[reference:98].
? Will my sustainability disclosures need to be assured?
From 2027, companies must disclose their assurance status on a “disclose or explain” basis[reference:99]. Mandatory limited assurance is expected from 2028/29, with full reasonable assurance targeted from 2030[reference:100].
? What are Scope 3 emissions and do I need to report them?
Scope 3 emissions are indirect emissions from your value chain (suppliers, customers, etc.). Under the FCA’s proposals, Scope 3 reporting is on a comply-or-explain basis with an optional 1-year deferral[reference:101].
? How do UK SRS align with IFRS/ISSB?
UK SRS are the UK-endorsed versions of IFRS S1 and S2[reference:102]. They are closely aligned with the global baseline but adapted in places to reflect the UK context[reference:103].
Need Help Navigating UK SRS?
The transition to UK Sustainability Reporting Standards represents a significant change for many businesses. Our team can help you understand your obligations, conduct a gap analysis, build the necessary data capability, and develop a roadmap to compliance.
Book Your UK SRS ConsultationReferences
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3. ICAEW. (2026). UK SRS: A new chapter for UK sustainability reporting. Available at: https://www.icaew.com []
4. FRC. (2026). Sustainability Reporting Developments: Frequently Asked Questions. Available at: https://www.frc.org.uk []
5. GOV.UK. (2026). UK Sustainability Reporting Standards: UK SRS S1 and UK SRS S2. Available at: https://www.gov.uk []
6. KPMG. (2026). FCA CP26/5 – from TCFD to UK SRS. Available at: https://launch.kpmg.com []
7. PrimeGlobal. (2026). Understanding the upcoming UK Sustainability Reporting Standard. Available at: https://www.primeglobal.net []
8. Osborne Clarke. (2026). ESG Knowledge Update | March 2026. Available at: https://www.osborneclarke.com []
9. ISS Corporate. (2026). UK SRS Published: A New Chapter for Sustainability Reporting. Available at: https://www.iss-corporate.com []
