Big changes are coming for UK companies when it comes to how they report on sustainability and climate-related risks. The UK government has officially released the exposure drafts of its first-ever UK Sustainability Reporting Standards (UK SRS) — setting the stage for a future where ESG reporting will be more consistent, comparable, and investor-ready.
Built on the backbone of international frameworks, these new standards — UK SRS S1 and UK SRS S2 — aim to align the UK with global best practices while tailoring the details for domestic law and business reality.
You can dive straight into the consultation materials here, or if you’re keen to see the draft documents themselves:
What are the UK SRS and why now?
The world is moving fast when it comes to ESG disclosures. Investors are demanding clarity, regulators are raising the bar, and companies are trying to keep up with overlapping standards from all directions. In this context, the UK’s move to introduce its own sustainability reporting standards is both strategic and overdue.
These new standards are based almost word-for-word on the IFRS Sustainability Disclosure Standards (developed by the ISSB), which launched globally in 2023. The UK versions make light edits tweaking legal language, adapting references to UK laws, and making sure everything fits smoothly into the British regulatory system.
Let’s break down what’s inside these drafts.
UK SRS S1: The sustainability reporting playbook
Think of S1 as the master guide for how companies should disclose sustainability-related risks and opportunities — no matter the topic (climate, biodiversity, social issues, you name it).
Key principles in S1:
- Materiality is key: Only disclose what’s financially material i.e., what could sway investors’ decisions.
- Tell a connected story: Your sustainability info should link back to your financials not exist in a silo.
- Consistency and comparability: Report in ways that let stakeholders track performance over time and across industries.
- No greenwashing: Info needs to be accurate, complete, and balanced without cherry-picking data.
Structure-wise, S1 follows four big themes:
- Governance: Who’s overseeing sustainability? What’s their role?
- Strategy: How do ESG issues affect your business model and plans?
- Risk Management: How are you identifying and managing sustainability risks?
- Metrics & Targets: What numbers are you tracking, and what goals have you set?
So far, so familiar — but this sets a legally consistent foundation for sustainability reporting in the UK.
UK SRS S2: a deep dive into climate
If S1 is the map, S2 is the climate-specific GPS. It drills down into climate-related disclosures, aligning tightly with the TCFD framework and extending it with more granular requirements.
Highlights of S2 include:
- Clear governance disclosures: Boards must explain how they oversee climate strategy.
- Scenario planning: Companies must test their resilience under different climate futures including at least one that limits global warming to 1.5°C.
- Greenhouse gas (GHG) emissions: Scope 1, 2, and 3 must be disclosed. There’s some flexibility (read: breathing room) on Scope 3 early on.
- Transition plans and targets: Firms need to explain how they’ll decarbonise and how they’ll measure success.
These aren’t fluffy ambitions — they’re hard requirements designed to make climate-related risks real, measurable, and visible to the market.
What’s been “UK-ified”?
Here’s what’s different in the UK version compared to the international baseline:
- Legal references now point to UK regulations (like the Companies Act 2006).
- Terminology has been tweaked for UK-specific institutions and frameworks.
- No new legal requirements — yet. But the government has signalled these will form the basis for future legislation.
The idea is to maintain global interoperability (so multinationals aren’t stuck reporting in 10 different ways) while also ensuring the standards work legally and practically in a UK setting.
Who needs to pay attention?
While no company is suddenly forced to use these standards overnight, the writing is on the wall. Here’s who should start paying close attention:
- Large listed companies
- Financial services firms
- Public interest entities (PIEs)
- Any business already disclosing under TCFD or preparing for the UK Green Taxonomy
What’s next?
The consultation runs until 14 August 2025, and the UK government is actively seeking feedback from:
- Companies (both reporters and preparers)
- Investors and analysts
- NGOs and civil society
- Accountants and assurance providers
Depending on the feedback, the final standards could be adopted and operational in 2026, with phased timelines based on company size and sector.You can access the full consultation document and submit your feedback here.
