UK SRS S2: Climate-related Disclosures

UK SRS S2 is the UK's climate-related disclosure standard — the UK endorsement of the ISSB's IFRS S2, published by the on 25 February 2026.

It is voluntary today.

Under the FCA's CP26/5 proposals, 515 UK listed companies in full scope — out of around 600 affected in total — would report climate risks and opportunities under UK SRS S2 for accounting periods beginning on or after 1 January 2027.

Those proposals would replace the existing TCFD-aligned listing rule disclosures with quantified financial effects, mandatory scenario testing and value chain emissions reporting.

Nothing in UK SRS S2 is law: the obligation depends on an FCA Policy Statement, which the FCA aims to publish in autumn 2026 and had not published as at 1 August 2026.

The clause-by-clause reference for UK SRS S2 is maintained on our primary reference site, and is the place to start if you want the standard itself rather than the delivery view.

What is UK SRS S2?

UK SRS S2 requires an entity to disclose the climate-related physical risks, transition risks and opportunities that could reasonably be expected to affect its cash flows, its access to finance, or its cost of capital.

The standard must be applied together with UK SRS S1, which sets the general requirements — materiality, reporting boundary, and the "Connected information" requirement with the financial statements — that UK SRS S2 then applies to climate.

For how the two standards fit together, see UK SRS S1 and S2.

Is UK SRS S2 mandatory?

No UK entity is required by law to report against UK SRS S2 today.

Any UK entity may adopt it voluntarily, and has been able to since 25 February 2026.

Mandatory status for listed companies rests entirely on FCA CP26/5, which was published on 30 January 2026, closed on 20 March 2026, and awaits a Policy Statement.

UK SRS S2 requirements: the four disclosure pillars

UK SRS S2 keeps the four-pillar structure inherited from TCFD — governance, strategy, risk management, and metrics and targets.

What changed is what sits inside each pillar.

The key upgrade over TCFD is mandatory quantification of current and anticipated financial effects.

The four-pillar architecture is covered in more depth at the UK SRS four pillars.

Climate resilience and scenario analysis under UK SRS S2

Unlike the TCFD recommendations, UK SRS S2 makes climate scenario analysis a requirement rather than an expectation.

An entity must test its strategy and business model against climate-related scenarios, with the sophistication of the analysis commensurate with its exposure to climate-related risk.

Companies with significant climate exposure can no longer rely on a qualitative narrative scenario alone.

Scenario analysis requirements are covered in detail at climate scenario analysis under UK SRS.

Scope 1, 2 and 3 emissions under UK SRS S2

UK SRS S2 requires absolute gross greenhouse gas emissions across all three scopes, measured in accordance with the GHG Protocol Corporate Standard.

Scope 3 under UK SRS S2 — what the FCA actually proposes

Scope 3 sits outside the hard 2027 obligation.

A company may elect a one-year transitional relief from disclosing Scope 3; electing it requires only a statement in the annual financial report that the disclosures have not been made, with no further explanation required.

From periods beginning on or after 1 January 2028 the relief has expired and Scope 3 falls to comply-or-explain — a company either discloses Scope 3, or identifies the paragraphs not disclosed, the reasons, and the steps it is taking.

The draft instrument is written without a sunset on that comply-or-explain limb, so Scope 3 does not become fully mandatory in 2028 or in any later year in the current draft.

A company already disclosing Scope 3 may continue to do so — the proposed rules would not prevent it.

See Scope 3 under UK SRS for the fifteen GHG Protocol categories and the data work each one implies.

Cross-industry metric categories

Beyond greenhouse gas emissions, UK SRS S2 requires disclosure against the cross-industry metric categories carried over from IFRS S2 — the assets or business activities exposed to transition risk and to physical risk, those aligned with climate-related opportunities, the capital deployed towards climate risks and opportunities, any internal carbon price, and how climate is factored into executive remuneration.

Industry-based metrics may also be considered: the UK amendment softens the SASB reference from "shall refer to and consider" to "may refer to and consider".

Metrics, targets and financed emissions

Where an entity has set climate-related targets, UK SRS S2 requires disclosure of the metric used, the objective, the base year and the period covered, and how the target is monitored.

UK SRS S2 for financial institutions

Banks, asset managers and insurers face the most extensive UK SRS S2 requirements through financed emissions disclosure, broken down by industry and by asset class.

One change bears on this cohort specifically, though it is not a UK-specific amendment: the ISSB itself removed the requirement to use the Global Industry Classification Standard in its December 2025 amendment to IFRS S2 (the UK's own proposal to drop GICS was withdrawn once the ISSB acted), so any internationally recognised industry classification system may be used for financed emissions — GICS is not mandatory.

Sector-specific detail is at UK SRS for financial services.

Climate-related transition plans under UK SRS S2

UK SRS S2 does not require an entity to have a climate-related transition plan, or to set climate targets aligned with any particular goal.

Where an entity does have a transition plan, the standard requires disclosure of specific information about it, including the key assumptions used in developing the plan and the dependencies on which the plan relies.

Under FCA CP26/5, in-scope listed issuers would be required to state whether and where a transition plan has been published, but not to publish one.

The wider question of mandatory transition plan requirements sits with the Government: DESNZ consulted on implementation routes between June and September 2025, and the GOV.UK page still reads "we are analysing your feedback".

For detailed coverage of transition plan disclosure requirements, see transition plans under UK SRS.

Assurance of UK SRS S2 disclosures

CP26/5 proposes a transparency statement about assurance, not mandatory assurance.

An in-scope company would state whether it has obtained third-party assurance over its UK SRS disclosures, and where it has, give the provider's name, which disclosures were assured and to what level, which standards were used, and where the report can be found.

The FCA expressly does not require a company to give reasons for choosing not to obtain assurance.

ISSA (UK) 5000, issued by the FRC on 12 November 2025 and effective for engagements on periods beginning on or after 15 December 2026, is for voluntary use — it governs how an assurance engagement is performed, not whether one must be commissioned.

See UK SRS assurance.

How UK SRS S2 differs from IFRS S2

UK SRS S2 is the UK endorsement of IFRS S2. The UK government consulted on six proposed amendments in June 2025, but two did not survive to publication (one withdrawn, one replaced) and further provisions were added afterwards. The authoritative list of final differences is Annex A of the government's consultation response, which carries no headline count. The most significant:

1. No fixed effective date — the effective-date clauses were removed, so mandatory application is set instead by separate UK regulation (FCA Listing Rules for listed companies, the Companies Act for others)
2. Delayed reporting relief removed — the IFRS S1 relief allowing sustainability information to be published at a different time from the financial statements in the first year was withdrawn
3. Climate-first relief made untimed — the IFRS S1 relief permitting non-climate topics to be deferred was retained but its fixed one-year period was removed from the Standard itself; the FCA has proposed, but not yet confirmed, that it would remain available up to periods beginning before 1 January 2029
4. SASB reference softened — industry-based metrics are "may refer to and consider" rather than "shall refer to and consider"
5. Not a UK amendment: industry classification — the requirement to use the Global Industry Classification Standard was removed by the ISSB's own December 2025 amendment to IFRS S2 (the UK's own proposal to drop it was withdrawn once the ISSB acted), so any internationally recognised classification may be used for financed emissions
6. Transitional reliefs tied to mandatory use — added paragraphs clarify how an entity states compliance when using the reliefs, with application subject to the relevant UK regulation or legislation

None of these changes what UK SRS S2 asks for in substance; they change when it applies and how far the ISSB's industry guidance binds.

New or amended ISSB standards do not apply in the UK automatically — each must pass a formal endorsement process through the Technical Advisory Committee and the Policy and Implementation Committee, with the final decision taken by the Secretary of State for Business and Trade.

Side-by-side detail is at UK SRS vs IFRS S1 and S2.

UK SRS S2 vs TCFD: what actually changes

A company already reporting against the FCA's TCFD-aligned listing rules is partway to UK SRS S2, not starting from zero.

The four things that change are mandatory quantification of financial effects, the "Connected information" requirement with the financial statements, required scenario analysis, and Scope 3 reporting.

TCFD itself was created by the Financial Stability Board and disbanded in 2023, with its monitoring responsibilities transferred to the IFRS Foundation — IFRS S2, and through it UK SRS S2, fully incorporates its four-pillar architecture.

See TCFD vs UK SRS.

Who reports under UK SRS S2, and when

Voluntary now. Any UK entity may adopt UK SRS S2, and has been able to since 25 February 2026.

Proposed mandatory from 2027. 515 listed companies in full scope under CP26/5 — UKLR 6, 16 and 22 — with UKLR 14 and 15 issuers giving a transparency and signposting statement only. Around 90 of the 515 are non-UK incorporated. Closed-ended investment funds and open-ended investment companies are excluded.

Private companies: undetermined. The Modernising Corporate Reporting programme will consider whether private entities should report against UK SRS, with a consultation stated as "later in 2026". No government document proposes any threshold or date for private companies.

See who must comply with UK SRS and the UK SRS timeline for implementation phases.

Transitional reliefs available

First-year reliefs in the standard itself include no comparative information and alternative GHG measurement methods.

Separately, CP26/5 proposes elective transitional reliefs a company may opt into: non-disclosure of Scope 3 for one year, and non-disclosure of UK SRS S1 non-climate matters for two years.

Electing a relief requires a statement in the annual financial report that the disclosures have not been made, and no further explanation — the FCA's proposed "explain" provisions are not engaged by using a transitional relief.

Under CP26/5's proposal, none of the transitional reliefs would remain available for periods beginning on or after 1 January 2029 — but that date is not yet confirmed by an FCA Policy Statement.

UK SRS S2 implementation: the four hardest areas

Based on professional services commentary on early voluntary adoption, four areas emerge as the most resource-intensive.

1. Scope 3 emissions data along the value chain

Advisory firms converge on 12–18 months of supplier engagement work before full Scope 3 disclosure is achievable.

The FCA's phasing provides breathing space, but the data infrastructure work does not compress.

2. Climate scenario analysis with quantified financial effects

UK SRS S2 requires scenario analysis with rigour commensurate with exposure.

For a company with significant climate exposure, that means quantified analysis with explicit, disclosed assumptions rather than a narrative.

3. Connected information between climate disclosures and the financial statements

The UK amendment removing the delayed reporting relief means the climate disclosures and the accounts are published together, for the same period, on the same boundary.

That demands close coordination between the sustainability and finance functions, with data and assumptions consistent across both.

4. Financed emissions for financial institutions

Asset managers, banks and insurers face the most extensive UK SRS S2 requirements.

Industry classification choices and methodology selection materially affect the figures disclosed.

Implementation priorities

Listed companies: map existing TCFD disclosures to UK SRS S2, build Scope 3 data infrastructure, upgrade scenario analysis, and establish a cross-functional team spanning sustainability, finance and risk.

Financial institutions: design the financed emissions methodology and the data systems behind it, and decide the industry classification early.

Private companies: monitor the Modernising Corporate Reporting consultation and consider voluntary adoption.

Start with a structured gap assessment — see UK SRS gap analysis.

For the compliance pathway, see UK SRS compliance guide and UK SRS reporting guidance.

UK SRS S2 — frequently asked questions

What is UK SRS S2?

UK SRS S2 is the UK's climate-related disclosure standard, published by the Department for Business and Trade on 25 February 2026.

It is the UK endorsement of the ISSB's IFRS S2, with UK-specific amendments.

It requires an entity to disclose the climate-related risks and opportunities that could reasonably be expected to affect its cash flows, its access to finance or its cost of capital.

Is UK SRS S2 mandatory?

No — UK SRS S2 is voluntary for every UK entity today.

CP26/5 proposes making it mandatory for in-scope listed companies for accounting periods beginning on or after 1 January 2027, subject to an FCA Policy Statement the FCA aims to publish in autumn 2026.

Who has to report under UK SRS S2?

Under CP26/5, 515 listed companies would be in full scope — those in the commercial companies (UKLR 6), non-equity and non-voting equity shares (UKLR 16) and transition (UKLR 22) categories — out of around 600 affected in total.

UKLR 14 and UKLR 15 issuers would give a transparency and signposting statement only.

Does UK SRS S2 require Scope 3 emissions?

The standard requires absolute gross Scope 1, 2 and 3 emissions under the GHG Protocol.

But under CP26/5 a company may elect a one-year relief, after which Scope 3 falls to comply-or-explain from periods beginning 1 January 2028, with no sunset drafted on that limb.

When is the UK SRS S2 deadline?

There is no deadline today, because the standard is voluntary.

The FCA proposes its rules come into force on 1 January 2027 and apply to accounting periods beginning on or after that date, which puts the first reports in 2028 for December 2027 year-ends.

What is the difference between UK SRS S2 and IFRS S2?

UK SRS S2 differs from IFRS S2 in the respects set out in Annex A of the government's consultation response, which carries no headline count — including no fixed effective date, removal of the delayed reporting transition relief, a non-climate reporting relief retained but left untimed in the Standard (with the FCA separately proposing, unconfirmed, availability to periods beginning before 1 January 2029), softened SASB references, and added paragraphs on stating compliance when using the reliefs. The Global Industry Classification Standard requirement was dropped by the ISSB's own December 2025 change, not a UK amendment.

The disclosure requirements themselves are the ISSB global baseline.

Does UK SRS S2 require a transition plan?

No — UK SRS S2 does not require an entity to have a transition plan, only to disclose information about one if it has one.

Does UK SRS S2 require external assurance?

No — CP26/5 proposes a transparency statement about assurance, not mandatory assurance.