Final UK SRS rules signals ‘fundamental shift’ in sustainability data
Sustainability reporting will sit closer to the “core of financial and risk reporting”, after the UK’s department for business & trade published the final versions of the UK Sustainability Reporting Standards (UK SRS S1 and UK SRS S2) last week.
The framework for corporate disclosures is aiming to boost transparency around general sustainability-related risks and opportunities (S1) and also specifically climate-related risks and opportunities (S2).
See also: FCA urged to ‘swiftly’ update sustainability disclosure rules
The standards were created by assessing the global baseline of the IFRS Sustainability Disclosure Standards and encompass materiality, governance, strategy, risk management, metrics and targets. The department for business & trade department also took into account alignment with the International Sustainability Standards Board’s (ISSB) and the Financial Conduct Authority (FCA)’s responsibility for enforcing UK Listing Rules.
Currently, the standards are for voluntary use but the UK government and the FCA is considering whether to introduce requirements for certain UK entities to report against these standards. The FCA’s consultation CP26/5: Aligning listed issuers’ sustainability disclosures with international standards closes on 20 March 2026.
“We welcome confirmation of the decision to closely align this framework with the ISSB standards, which can help reinforce the UK’s global competitiveness,” commented UKSIF CEO James Alexander.
“We look forward to policymakers now focusing on delivery through the Modernising Corporate Reporting (MCR) programme and wider initiatives. We particularly want to see greater clarity on how the standards can become mandatory for in-scope companies through this process.
“An efficient transition from TCFD-aligned to SRS-aligned reporting for companies over the coming years will bring tangible benefits to both investors and reporting organisations.”
See also: The future direction of the UK’s Sustainability Disclosure Regime
Yee Chow, head of sustainability strategy & implementation at Zevero, added: “The UK SRS signals a fundamental shift in how sustainability data is expected to be used. For companies, this means it will increasingly sit alongside financial reporting, with greater structure, consistency and accountability.
“The standards move sustainability reporting closer to the core of financial and risk reporting. That’s a necessary shift, but it also means sustainability can no longer sit in a silo. It has to be operationalised across the business.
“It also marks the end of the preparation phase. The UK government has drawn its line. The FCA consultation closes next month. Companies that have been waiting for final standards before acting are running out of time to wait.”
On UK Listing Rules, the regulator separately announced this week it will be bringing forward a review to consider how they apply to specific types of investment entities, such as investment trusts. The Association of Investment Companies said it welcomed the assessment of how the rules “ensure that boards support strong shareholder rights and engagement and manage conflicts of interests”.