UK SRS S1 · Materiality
UK SRS S1 materiality: how it is defined
UK SRS S1 materiality turns on one test in UK SRS S1 paragraph 18: would omitting, misstating or obscuring the information influence the decisions of investors, lenders and other creditors?
It is single, financial materiality, consistent with IFRS S1 — not the double materiality of the EU’s CSRD.
The definition
What UK SRS S1 means by material
UK SRS S1 materiality turns on one test: under UK SRS S1 paragraph 18, information is material if omitting, misstating or obscuring it could reasonably be expected to influence the decisions primary users make on the basis of general purpose financial reports.
Primary users are defined as existing and potential investors, lenders and other creditors.
The Standard sets no thresholds and does not predetermine what is material in any particular situation (UK SRS S1 paragraph B19).
This is not the same as financial statement materiality.
Sustainability materiality asks about influence on an investor’s assessment of the company’s prospects, not about whether the accounts would change.
This distinction is central to the UK SRS framework.
Sustainability-related financial information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that primary users of general purpose financial reports make on the basis of those reports.
| Asks whether information… | |
|---|---|
| Financial statement materiality | …would change the numbers in the accounts. |
| Sustainability materiality (UK SRS) | …about sustainability-related risks and opportunities would influence an investor’s assessment of prospects — even before the financial impact appears in the accounts. |
Comparison
Single materiality vs double materiality
UK SRS uses a single, financial materiality approach, consistent with IFRS S1 globally.
| UK SRS and IFRS S1 | CSRD and ESRS | |
|---|---|---|
| Perspective | “Outside-in”: how sustainability matters could reasonably be expected to affect the company | Outside-in and “inside-out”: also how the company’s activities affect people and the environment |
| Test | Effect on cash flows, access to finance or cost of capital over the short, medium or long term (UK SRS S1 ¶3) | Impacts count regardless of whether they affect cash flows, access to finance or cost of capital |
| Source | UK SRS S1 ¶¶3, 18 | ESRS 1 — Commission Delegated Regulation (EU) 2023/2772, Annex I |
A company considers sustainability risks and opportunities through their potential effect on its cash flows, access to finance, cost of capital or business model over the short, medium and long term.
That differs fundamentally from the double materiality approach of the EU Corporate Sustainability Reporting Directive, adopted under Directive 2013/34/EU.
For the full comparison with the global baseline, see UK SRS vs IFRS S1 and S2.
A UK company subject to both UK SRS and CSRD will need to apply both materiality lenses.
Overseas companies listed in several jurisdictions should review these differences carefully.
Process
Materiality assessment under UK SRS in practice
UK SRS does not prescribe a materiality assessment methodology.
It does require companies to disclose the process and judgements they used to identify material sustainability topics.
Paragraph 59 requires them to identify the standards and other sources of guidance they applied.
In practice, a robust assessment builds a long list of topics, assesses each against the definition, engages relevant stakeholders and documents the rationale for every inclusion and exclusion.
A structured gap analysis can show where materiality assessment processes need strengthening.
A typical assessment
- 01Build a long list
Potential sustainability topics relevant to the industry and value chain.
- 02Assess each topic
Against the paragraph 18 definition.
- 03Engage stakeholders
Those relevant to the topics on the list.
- 04Document the rationale
For including or excluding each topic — the judgement must be evidenced.
Starting point
Using the SASB Standards as a starting point
The SASB Standards provide industry-specific lists of sustainability topics likely to be material.
They are not mandatory in the UK, but offer a practical starting point for a company building its materiality assessment for the first time.
The ISSB maintains them alongside its global disclosure framework.
UK SRS S1 ¶¶55(a) and 58(a): an entity “may refer to and consider” the SASB Standards.
IFRS S1 says “shall”.
Recorded in Annex A of the DBT consultation response
Stakes
Why this matters
The materiality definition determines the boundary of a company’s UK SRS disclosures.
A well-conducted assessment protects the company from both under-disclosure — which, under the FCA’s final listing rules that followed CP26/5, risks regulatory challenge where it is not explained — and over-disclosure.
It is also the foundation for the statement of compliance.
Boards should be able to understand and evidence the materiality judgements made.
For the disclosure requirements structured around the four-pillar framework, see our dedicated guide.
Review the S1 scope and timing requirements and the UK SRS timeline too.
For the primary texts, see the FCA’s CP26/5 consultation paper, the published UK SRS S1 and S2, and the GOV.UK UK SRS guidance, which confirms the standards are available for voluntary use by any entity.
Under the FCA’s comply-or-explain listing rules from 2027, under-disclosure without an explanation risks regulatory challenge.
Creates reporting burden without corresponding value to investors.
Sources
Primary sources
Every figure, date and status on this page traces to the instrument’s owner. Secondary commentary is never the source for a number.
- Department for Business and TradeUK SRS S1 General Requirements — final standard (PDF)
Published 25 February 2026. ¶3, ¶¶17–19, ¶B19, ¶¶55(a), 58(a) and 59.
- Department for Business and TradeUK Sustainability Reporting Standards: UK SRS S1 and UK SRS S2
The publication page for both standards.
- Department for Business and TradeUK SRS consultation response (PDF)
Annex A records the "shall" to "may" SASB amendment.
- Department for Business and TradeUK Sustainability Reporting Standards — GOV.UK guidance
The standards are available for voluntary use by any entity.
- IFRS FoundationIFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information
The IFRS S1 materiality definition UK SRS S1 carries.
- IFRS FoundationInternational Sustainability Standards Board
Maintains the SASB Standards alongside the global disclosure framework.
- IFRS FoundationSASB Standards
Referenced permissively in UK SRS S1 ¶¶55(a) and 58(a).
- Financial Conduct AuthorityCP26/5: Sustainability disclosures
The consultation on the listing rules that apply UK SRS, finalised by PS26/19.
- Financial Conduct AuthorityPS26/19: Aligning listed issuers' sustainability disclosures with international standards
First published 30 September 2026. The final rules: listed companies in scope report against UK SRS on a comply-or-explain basis from accounting periods starting on or after 1 January 2027.
- Financial Conduct AuthorityCP26/5: Aligning listed issuers' sustainability disclosures with international standards (PDF)
The consultation paper itself.
- EUR-LexCommission Delegated Regulation (EU) 2023/2772 — Annex I, ESRS 1
The double materiality requirement, adopted under Directive 2013/34/EU.
- EFRAGEFRAG sustainability reporting
Technical adviser on the ESRS, for the double materiality comparison.
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UK SRS vs IFRS S1 and S2
Every UK difference from the global baseline, including the SASB change.
UK SRS S1 scope and timing
Who UK SRS S1 applies to, and when.
UK SRS four pillars
The disclosure structure materiality feeds.
UK SRS gap analysis
Where your materiality process and disclosures fall short.