The UK government has released its first Sustainability Reporting Standards (SRS), designed for international comparability and compatibility for investors, and integration into financial reporting frameworks.
UK SRS S1 and S2 are based on the first standards issued by the International Sustainability Standards Board (ISSB), covering general requirements for sustainability-related financial disclosures and climate-specific disclosures.
Initially voluntary, the SRS require companies to publish sustainability disclosures in parallel with financial statements and covering the same periods.
The UK standards include minimum changes from the ISSB standards to support consistency and comparability across the other 30-plus jurisdictions committed to introducing the board’s standards. They are also broadly comparable with disclosures reported under Europe’s Corporate Sustainability Reporting Directive, revisions to which were finalised this week, alongside changes to the Corporate Sustainability Due Diligence Directive.
The introduction of the new standards marks a shift in the sustainability reporting landscape in the UK as they will replace existing requirements for disclosures aligned with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
Last month, the Financial Conduct Authority launched a consultation on proposals requiring UK-listed firms to report according to the new UK SRS from the start of 2027. Once adopted by public companies, the government is expected to extend use of SRS to large non-listed firms.
“We particularly want to see greater clarity on how the standards can become mandatory for in-scope companies through this process,” said James Alexander, CEO of the UK Sustainable Investment and Finance Association.
“An efficient transition from TCFD-aligned to SRS-aligned reporting for companies over the coming years will bring tangible benefits to both investors and reporting organisations.”
The new framework is expected to prompt investment in technologies and processes to increase the robustness and accuracy of sustainability reporting.
“We’re likely to see a growing gap between what companies are expected to report and what they can realistically measure today, particularly value chain data. Bridging that gap will require investment in data quality, not just reporting frameworks,” said Yee Chow, Head of Sustainability Strategy & Implementation at carbon accounting software firm Zevero.
“The standards move sustainability reporting closer to the core of financial and risk reporting. That’s a necessary shift, but it also means sustainability can no longer sit in a silo. It has to be operationalised across the business.”
