UK Sustainability Reporting Standards (SRS) Update:
Final Version Release & What to Expect
What’s Happening?
The UK’s financial regulator, the FCA, is planning on replacing current TCFD-aligned disclosure requirements for listed companies with a new set of Sustainability Reporting Standards (UK SRS) based on IFRS disclosure standards S1 and S2. These standards will expand the disclosure requirements beyond the realm of climate change, to include all material sustainability-related risks and opportunities.
While the current TCFD listing rule operates on a ‘comply or explain’ basis, UK SRS disclosures only allow omissions where topics are found to be immaterial (as per IFRS materiality definitions). Although the standards themselves have now been released, the implementation timeline and inclusion criteria are not yet finalised. Nevertheless, the implementation is expected to be phased, meaning that for the first year (applicable to financial years beginning on or after 1 January 2027), companies will likely only need to report climate-related disclosures and may omit reporting on Scope 3 emissions (those related to a company’s value chain). Scope 3 emissions are expected to become mandatory in the second year of reporting, with disclosures on wider sustainability topics being required from year 3 onwards.
What are the UK Sustainability Reporting Standards?
The UK SRS are based on the International Sustainability Standards Board (ISSB) framework, specifically IFRS S1 (general sustainability disclosures) and IFRS S2 (climate-related disclosures). The UK Government published the standards at the end of February and the FCA will be consulting on the latest draft until 20 March 2026. Final FCA rules are expected by autumn, at which point there will be more clarity on exactly which companies will be obligated to report according to these standards and when.
Once formally adopted, UK SRS will replace TCFD as the basis for sustainability reporting, aiming to provide:
- Greater consistency, comparability, and transparency,
- Improved investor confidence,
- Alignment with a global disclosure baseline,
- A more comprehensive view of sustainability-relevant risks and opportunities beyond climate.
Why Is This Happening?
The UK is replacing its older TCFD-based reporting system with the new UK SRS standards because:
- Global sustainability reporting is shifting to ISSB-aligned standards
- Investors want clearer, consistent sustainability information
- The UK wants to keep its markets competitive and transparent
UK SRS Timeline
What Companies Will Need To Do?
According to currently expected timelines, the first round of reporting will apply to financial years beginning on or after 1 January 2027. Companies in scope will be required to:
- Disclose material climate-related risks and opportunities in annual reports
- Follow the UK SRS S2 framework based on ISSB standards, which are themselves based on TCFD recommendations
- Provide Scope 3 data, or an explanation of why they have been unable to until 2028 (acknowledging that Scope 3 data is complex and partially dependent on suppliers and partners)
About the author
Peter is a Principal Consultant at Energise and is dedicated to protecting the natural world that he loves, both for himself and for future generations.
