Climate Transition Planning for UK SRS S2
Strategic frameworks for developing credible net-zero transition plans that meet UK SRS S2 requirements while driving business transformation and competitive advantage.
UK SRS S2 Transition Planning Requirements
There is no requirement in the UK to have a climate transition plan.UK SRS S2requires a company that has one to disclose it — the obligation is a disclosure obligation, not an obligation to produce a plan.
Under FCA CP26/5, which is a proposal and not in force, in-scope listed companies would state whether they have published a transition plan and where it can be found, or explain why not. Companies in the secondary listing and depositary receipt categories are expressly outside that proposal — the FCA is not proposing UK SRS-aligned disclosures, including for transition plans, for those categories.
The Department for Energy Security and Net Zero consulted on climate-related transition plan requirementsbetween 25 June and 17 September 2025. That consultation closed and the GOV.UK page still reads “We are analysing your feedback” — no government response has been published as of 27 July 2026, so nothing about mandatory transition plans is settled.
The Transition Plan Taskforce (TPT) Disclosure Framework, assumed by the IFRS Foundation in 2024, provides supplementary guidance for developing credible plans. For comprehensive UKSRS guidance on S2 transition planning requirements, see uksrs.org.uk.
Five Pillars of Climate Transition Planning
1. Foundations: Governance & Strategy
- Board oversight of transition planning
- Executive accountability frameworks
- Integration with business strategy
- Stakeholder engagement processes
- Climate competency development
- Risk management integration
2. Objectives: Science-Based Targets
- Net-zero commitment and timeline aligned with SBTi Corporate Net-Zero Standard
- Science-based interim targets
- Sectoral decarbonisation pathways
- Value chain emission targets per GHG Protocol Scope 3 Standard
- Carbon budget allocation
- Scope 1, 2, 3 target breakdown
3. Implementation: Action Plans & Levers
- Energy efficiency programmes
- Renewable energy transition
- Operational decarbonisation
- Technology investment roadmaps
- Supply chain transformation
- Product and service innovation
4. Financial Planning & Investment
- Capital allocation frameworks
- Investment requirement quantification
- Cost-benefit analysis
- Financial risk assessment
- Green financing strategies
- Carbon pricing integration
5. Tracking: Metrics & Indicators
- Emission reduction tracking
- Progress indicator monitoring
- Implementation milestone review
- Performance dashboard development
- Annual target assessment
- External verification processes
Climate Scenario Analysis for Transition Planning
UK SRS S2 requires companies to use climate scenario analysis to test the resilience of their transition plans under different climate pathways, drawing on IPCC AR6 climate scenarios and the IEA Net Zero by 2050 pathway.
Orderly Transition
Early, coordinated climate action with predictable policy changes and technology development. Gradual carbon price increases, steady renewable energy growth, manageable stranded asset risks.
Disorderly Transition
Late, sudden climate action with rapid policy changes and market disruption. Sudden carbon price shocks, rapid technology disruption, high stranded asset risks.
Failed Transition
Insufficient climate action leading to severe physical climate impacts. Extreme weather impacts, supply chain disruption, asset damage and regulatory intervention.
Implementation Roadmap
Phase 1: Foundation (Months 1-6)
- Governance Setup: Board climate committee, executive accountability, cross-functional teams
- Data & Baselines: Emissions inventory, value chain mapping, risk assessment
- Target Setting: Science-based targets, interim milestones, net-zero commitment
Phase 2: Strategy Development (Months 7-12)
- Scenario Analysis: Climate pathway modeling, business impact assessment, technology roadmapping
- Action Planning: Decarbonisation levers, investment priorities, implementation timeline
- Financial Integration: Capital allocation, carbon pricing, risk management
Phase 3: Implementation (Ongoing)
- Execution: Project delivery, technology deployment, operational changes
- Monitoring: Progress tracking, performance measurement, course correction
- Reporting: Annual disclosure, stakeholder engagement, plan updates
Start Your Compliance Journey
Create a credible, science-based climate transition plan that meets UK SRS S2 requirementswhile driving business value and competitive advantage. The TPT Disclosure Framework and FCA CP26/5set the context for the disclosures the FCA has proposed from accounting periods beginning on or after 1 January 2027 — proposals that remain subject to the FCA Policy Statement, unpublished as of 27 July 2026.