UK SRS — Frequently Asked Questions

Basic UK SRS Framework

What are the UK Sustainability Reporting Standards?

The UK Sustainability Reporting Standards (UK SRS) are the UK Government's endorsed versions of the ISSB's global baseline sustainability disclosure standards — IFRS S1 and IFRS S2.

Published by DBT on 25 February 2026, UK SRS S1 covers general sustainability-related financial disclosures while UK SRS S2 covers climate-related disclosures.

Both incorporate UK-specific amendments and are designed to sit within the existing Strategic Report framework under the Companies Act 2006.

How do UK SRS relate to IFRS S1 and IFRS S2?

UK SRS S1 and S2 are the UK's national adoptions of IFRS S1 and IFRS S2 respectively.

They follow the ISSB global baseline with minor UK-specific amendments, meaning companies reporting under UK SRS will be substantially aligned with the global ISSB framework.

The amendments address proportionality, Strategic Report placement, jurisdictional relief provisions, and alignment with existing UK reporting legislation.

What are the UK-specific amendments to the ISSB standards?

The UK has made targeted amendments to the global ISSB standards to fit the UK regulatory context.

These include modifications for proportionality considerations, specific placement requirements within the Strategic Report, transitional relief provisions for certain disclosure requirements, and technical amendments to align with existing UK corporate reporting legislation.

Timeline and Mandatory Dates

When does UK SRS become mandatory?

UK SRS S2 is proposed mandatory for accounting periods beginning on or after 1 January 2027, subject to the FCA Policy Statement expected in autumn 2026.

FCA CP26/5 Annex 2, paragraph 43 puts 515 listed companies in full scope, out of around 600 affected by the proposals in total.

UK SRS S1 non-climate disclosures are proposed to sit on a comply-or-explain basis; under the FCA's proposed transitional relief, in-scope companies could elect to defer them, meaning the relief would end for accounting periods beginning on or after 1 January 2029. The two-year relief period is a feature of the FCA's proposed rules, not the Standards themselves — UK SRS S1 appendix E carries no time limit of its own.

What is the Scope 3 transition timeline?

For accounting periods beginning on or after 1 January 2027, UK SRS S2 climate disclosures are proposed to be mandatory excluding Scope 3.

A company may elect a one-year transitional relief from Scope 3 disclosure for that first period.

Electing it requires only a statement in the annual financial report that the disclosures have not been made — CP26/5 paragraph 8.6 confirms that use of the transitional reliefs does not engage the proposed "explain" provisions.

Companies already disclosing Scope 3 may continue to do so.

For accounting periods beginning on or after 1 January 2028 the relief has expired and Scope 3 falls to comply-or-explain.

The draft instrument contains no sunset date, so comply-or-explain is the permanent position for Scope 3 rather than a staging post to full mandation.

Can companies adopt UK SRS voluntarily before mandatory dates?

Yes.

Both UK SRS S1 and S2 are available for voluntary use immediately following their publication on 25 February 2026.

However, voluntary adoption requires full compliance with the applicable standard — companies cannot cherry-pick individual disclosure requirements.

Scope and Application

Which companies must comply with UK SRS?

Nobody is required to report under UK SRS today — it remains voluntary pending the FCA's Policy Statement. Under the FCA's proposals, the initial mandatory scope would cover 515 listed companies in full, out of around 600 affected by the proposals in total.

This includes commercial companies (UKLR Chapter 6), companies with non-equity shares and non-voting equity shares (UKLR Chapter 16), and companies in the transition category (UKLR Chapter 22) — the premium and standard listing segments referenced in older commentary were abolished on 29 July 2024 and have no bearing on current UKLR scope.

FCA CP26/5 Chapter 3 contains the detailed scope definitions.

Do overseas companies listed in the UK need to comply?

Companies with only a secondary listing or a depositary receipts listing are not proposed to report against UK SRS.

Instead, the FCA's proposals would require them to state which overseas climate and sustainability standards they are subject to, or which they voluntarily follow, and to signpost where those disclosures can be found.

Companies with a primary listing in the UK, in the commercial companies, non-equity shares, or transition categories, are in scope of the UK SRS proposals regardless of domicile.

Will UK SRS apply to private companies?

The Government has indicated its intention to extend UK SRS to economically significant private companies and LLPs through Companies Act amendments.

However, the specific thresholds and timeline have not yet been confirmed.

Private companies should monitor regulatory developments for future obligations.

S1 and S2 Standards

What is the difference between UK SRS S1 and S2?

UK SRS S2 deals exclusively with climate-related financial disclosures and includes greenhouse gas emissions, climate risks and opportunities, and transition planning.

UK SRS S1 covers general sustainability-related financial disclosures beyond climate, including biodiversity, water resources, social factors, and human capital.

S2 is proposed mandatory from January 2027, while S1 follows on a comply-or-explain basis from January 2029.

What is the materiality definition under UK SRS?

UK SRS assesses materiality by reference to an entity's cash flows, its access to finance or its cost of capital (UK SRS S1 paragraph 3).

Sustainability information is material if omitting, misstating, or obscuring it could reasonably be expected to influence decisions that primary users make on the basis of general purpose financial reports (paragraph 18).

This focuses on financially material sustainability risks and opportunities rather than impact (double) materiality.

What is the four-pillar framework?

UK SRS uses a four-pillar disclosure framework inherited from TCFD but significantly expanded: Governance (oversight and governance processes), Strategy (actual and potential impacts on strategy and business model), Risk Management (processes to identify, assess, and manage sustainability risks), and Metrics and Targets (metrics and targets used to assess and manage sustainability-related risks and opportunities).

Climate and Scope 3

Is climate scenario analysis mandatory under UK SRS?

Yes.

Climate scenario analysis is mandatory under UK SRS S2, representing a significant strengthening from the TCFD regime where it was recommended but not required.

Companies must disclose scenario analysis assumptions, methodologies, and results as part of their strategy disclosures.

What must companies disclose about transition plans?

Under UK SRS S2, companies must disclose their climate transition plan or explain why they have not published one.

Where a transition plan exists, disclosures must cover emissions reduction targets, actions to achieve those targets, capital allocation committed to transition activities, and progress against previous commitments.

What are the Scope 3 disclosure requirements?

UK SRS S2 paragraph 29(a) requires disclosure of absolute gross Scope 3 greenhouse gas emissions across the 15 GHG Protocol categories where material, together with the approach to estimation, significant assumptions, and data limitations.

Under the FCA's proposals a company may elect a one-year relief from Scope 3 for accounting periods beginning in 2027; from accounting periods beginning 1 January 2028 Scope 3 sits on a comply-or-explain basis, with no sunset date in the draft instrument.

Assurance

Is assurance required for UK SRS disclosures?

UK SRS assurance is voluntary.

FCA CP26/5 paragraph 7.5 states unambiguously that the FCA is not proposing mandatory assurance requirements.

However, companies must disclose whether they have obtained third-party assurance and, if so, provide specific details about the assurance provider, scope, level, and standards used.

What is ISSA (UK) 5000?

ISSA (UK) 5000 is the UK sustainability assurance standard issued by the FRC.

It is voluntary, and it is effective for assurance engagements on sustainability information reported either for periods beginning on or after 15 December 2026, or as at a specific date on or after that date — and earlier application is permitted. It provides general requirements for both limited and reasonable assurance engagements.

The standard is profession-agnostic and applies to all sustainability information except that required in financial statements.

Legal Framework and Liability

What liability protections exist for UK SRS disclosures?

UK SRS disclosures made within the Strategic Report attract the same section 463 safe-harbour protection as other Strategic Report disclosures under the Companies Act 2006.

This limits directors' civil liability to circumstances where the director knew the statement was untrue or misleading, was reckless, or involved dishonest concealment.

Voluntary third-party assurance does not change this protection.

How does UK SRS replace TCFD?

The TCFD was created by the Financial Stability Board in 2015 and disbanded in 2023, with monitoring of climate-disclosure progress passing to the IFRS Foundation.

UK SRS S2 is proposed to replace the TCFD-aligned Listing Rules for accounting periods beginning on or after 1 January 2027, expanding disclosure requirements including scenario analysis, formal compliance statements, and the four-pillar framework with enhanced metrics and targets requirements.

The change in status is not uniform: UK SRS S2 climate disclosures other than Scope 3 are proposed to be mandatory, while Scope 3 and UK SRS S1 non-climate matters sit on comply-or-explain.

Implementation and Compliance

How should companies prepare for UK SRS compliance?

Companies should conduct a gap analysis of current TCFD reporting against UK SRS S2 requirements, assess Scope 3 data collection capabilities, review governance structures for sustainability oversight, evaluate systems and controls to meet UK SRS S1's "Connected information" requirement to report sustainability and financial information at the same time and for the same period (paragraphs 21–24), consider voluntary assurance arrangements, and brief the board on disclosure obligations and resource requirements.

Professional guidance is available from major accounting and consulting firms.

Where in the annual report do UK SRS disclosures go?

UK SRS disclosures are made within the Strategic Report under section 414CB(2A) of the Companies Act 2006.

Companies have flexibility in exactly where within the Strategic Report the disclosures appear, but they must be clearly identified as UK SRS disclosures and include a formal statement of compliance with the applicable standards.