What are the UK Sustainability Reporting Standards?
The UK Sustainability Reporting Standards (UK SRS) are a set of disclosure requirements that will govern how UK companies report sustainability-related financial information. These standards are based on the IFRS Sustainability Disclosure Standards developed by the International Sustainability Standards Board (ISSB), a standard-setting body of the International Financial Reporting Standards (IFRS) Foundation.
The ISSB was announced at COP26 to create a global baseline for sustainability reporting. On 26 June 2023, the ISSB published its first two standards:
- IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information)
- IFRS S2 (Climate-related Disclosures). These standards aim to connect sustainability reporting information with a company’s financial statements and accounting, helping investors compare sustainability information between companies.
The UK government aims to publish finalised versions of UK Sustainability Reporting Standards for voluntary use in early 2026. Once endorsed, these standards will provide the basis for future obligations within company law and Financial Conduct Authority (FCA) listing requirements.
Why the UK SRS matters for your business
Sustainability reporting is the fastest-growing type of non-financial reporting over the last ten years. As of 2026, organisations face a complex web of more than 600 different sustainability reporting standards, industry initiatives, frameworks, and guidelines worldwide. The UK SRS aims to cut through this complexity by providing a unified, transparent framework tailored to UK reporting companies.
Here’s why it matters:
- Investor confidence: The ISSB standards are intended to help investors assess the environmental and social impacts of a company, providing a means to evaluate potential risks and benefits associated with investing.
- Regulatory alignment: The UK government has established two committees to assist with the assessment and endorsement of IFRS Sustainability Disclosure Standards for UK use. The Financial Conduct Authority (FCA) will consider whether to introduce requirements for certain UK entities to report against the UK SRS.
- Competitive advantage: Companies that prioritise sustainability are statistically better-positioned to manage risks and create long-term shareholder value. Sustainability reporting serves as a competitive advantage by demonstrating a commitment to responsible business practices.
How the UK SRS aligns with global standards
The UK SRS doesn’t exist in isolation. It’s part of a broader effort to harmonise sustainability reporting across jurisdictions. As of 2025–2026, the primary standards organisations should follow are:
- European Sustainability Reporting Standards (ESRS/CSRD): Mandatory for EU companies, with a ‘double materiality’ perspective requiring companies to report on their impacts on people and the environment, as well as how social and environmental issues create financial risks and opportunities.
- ISSB Standards (IFRS S1 and S2): Focus solely on the financial impact of sustainability on business, connecting sustainability-related financial disclosures with financial statements.
- Global Reporting Initiative (GRI) Standards: The most widely used voluntary, modular, and comprehensive standard focused on an organisation’s impact on the economy, environment, and people. The GRI created the first global sustainability reporting standards in 1997.
The UK SRS is based on the ISSB standards, but the UK government has indicated it will tailor them to UK-specific requirements. Importantly, GRI and ISSB are collaborating to ensure their standards are interoperable, allowing companies to report on both impacts and financial risks without excessive duplication.
Who will be required to report under UK SRS?
Whilst the UK SRS will initially be available for voluntary use in early 2026, mandatory requirements are expected to follow. Here’s what we know:
- Listed companies and large organisations operating in UK capital markets will likely be the first to face mandatory disclosure requirements.
- Mandatory climate-related financial disclosure requirements were already introduced into UK legislation in 2022 for certain large companies and limited liability partnerships (LLPs).
- Quoted companies and public interest entities (PIEs) with over 500 employees are already subject to specific reporting requirements on environmental matters within the strategic report.
- Large companies are required to include a statement in the strategic report describing how directors have performed their duty under section 172 of the Companies Act 2006.
The FCA will determine the final scope of entities required to report against UK SRS, but if your business operates in regulated sectors or has significant stakeholder interest in sustainability performance, it’s wise to prepare now.
Key components of UK SRS: What to report
The UK SRS, based on IFRS S1 (general requirements) and IFRS S2 (climate-related disclosures), will require organisations to disclose:
Governance
How your board and management oversee sustainability-related risks and opportunities, including climate change.
Strategy
How sustainability matters—particularly climate-related risks and opportunities—affect your business operations, strategy, and financial position over the short, medium, and long term.
Risk Management
The processes you use to identify, assess, and manage risks related to sustainability matters, including how you integrate these into your overall risk management framework.
Metrics and Targets
Quantitative data on sustainability performance, including emissions data (Scope 1, 2, and 3), transition plan progress, and other stakeholders’ concerns. A materiality assessment will help you determine which sustainability information is most relevant to disclose.
Preparing for UK SRS: Practical steps for businesses
The shift from voluntary disclosure to mandatory sustainability reporting requirements represents a strategic imperative for long-term viability. Here’s how to get started:
- Conduct a materiality assessment: Determine which sustainability matters are most financially material to your business. Engage with stakeholders—including investors, employees, and other stakeholders—to identify priorities.
- Streamline your data collection: Sustainability reporting depends on accurate, accessible data across your business operations and value chain. Invest in platforms and resources that automate data collection and ensure transparency.
- Align with existing frameworks: If you’re already reporting under the Task Force on Climate-related Financial Disclosures (TCFD), GRI Standards, or Sustainability Accounting Standards Board (SASB) frameworks, assess how UK SRS aligns and where gaps exist.
- Develop a transition plan: Disclose how your organisation plans to manage risks and opportunities associated with climate change and other sustainability matters. This includes setting science-based targets and demonstrating progress.
- Build internal capacity: Managing change requires cross-functional collaboration. Train finance, sustainability, and operations teams to work together on disclosure requirements and performance metrics.
- Ensure assurance readiness: As sustainability reporting matures, external assurance of sustainability information will become standard practice. Prepare your data and processes for third-party verification.
The Broader Context: Sustainability Reporting in 2026
The UK is not alone in tightening sustainability reporting requirements. Globally, businesses face an evolving patchwork of regulations:
- Europe: The Corporate Sustainability Reporting Directive (CSRD) entered into force on 5 January 2023, with ESRS simplified in early 2026 to reduce the reporting burden by roughly 61% whilst maintaining high transparency.
- United States: California’s reporting obligations (SB 253 & SB 261) will begin in 2026 for large companies, focusing on Scope 1–3 emissions and climate financial risks.
For multinational organisations, navigating these requirements means understanding how UK SRS fits within a global context. The ISSB’s aim to create a global baseline offers hope that reporting companies will eventually benefit from greater consistency and reduced duplication.
Final thoughts: Sustainability reporting as a strategic opportunity
The UK Sustainability Reporting Standards represent more than a compliance exercise. They’re an opportunity to build trust, demonstrate accountability, and create long-term shareholder value. By disclosing your environmental and social impact alongside financial performance, you signal to investors, customers, and other stakeholders that your business is prepared for the challenges and opportunities of a sustainable future.
As the UK government moves towards mandatory requirements, the time to act is now. Don’t wait for legislation to force your hand. Start your materiality assessment, streamline your sustainability data, and position your organisation as a leader in transparent, meaningful reporting.
