The UK Sustainability Reporting Standards (UK SRS) are poised to revolutionise environmental, social and governance (ESG) disclosures across UK businesses. By aligning with the International Sustainability Standards Board (ISSB) while embedding UK-specific enhancements, UK SRS promises to deliver harmonised, comparable and decision-useful reporting. This is pivotal for investors, regulators and businesses alike.
The Foundation and Purpose of UK SRS
The UK SRS are grounded in the ISSB’s IFRS S1 and IFRS S2 standards, which cover general sustainability-related financial information and climate-related disclosures. These ISSB standards were launched in June 2023 to create a global baseline for sustainability reporting.
The UK has adapted this foundation to reflect domestic considerations. UK SRS incorporate minor amendments to better suit UK-contextual needs, such as removing the transition relief that allows delayed reporting in the first year and adjusting industry classification requirements for financed emissions. This approach ensures both international comparability and national relevance.
Structured, Comprehensive ESG Disclosure
UK SRS adopt the four-pillar framework inspired by the Task Force on Climate-related Financial Disclosures: governance, strategy, risk management and metrics and targets. This structure ensures companies systematically disclose how their boards oversee sustainability issues, integrate ESG into strategic planning, and monitor performance using clear metrics.
Additionally, UK SRS require detailed greenhouse gas emissions reporting, including Scope 3 emissions and forward-looking scenario analysis to assess business resilience in a low-carbon transition. This represents a significant leap forward compared with earlier frameworks.
Integration of Transition Planning
A key pillar of UK SRS is the integration of credible transition plans aligned with the Paris Agreement’s 1.5 °C goal. Particularly for financial institutions and FTSE 100 companies, such plans must outline how business models will adapt towards decarbonisation. The standards also mandate synchronised publication of sustainability disclosures alongside annual financial statements from the first year of adoption, enhancing comparability with traditional reporting.
Consultation and Regulatory Momentum
The UK government launched an exposure-draft consultation on UK SRS S1 and S2 in June 2025, inviting feedback until September 2025. Following the consultation and technical guidance from advisory committees, finalised standards are expected to become available in autumn 2025 for voluntary use.
Meanwhile, regulators such as the Financial Conduct Authority are considering applying UK SRS to listed companies, which could make compliance mandatory in the near future. This reflects a wider regulatory shift towards more robust and transparent sustainability disclosure across the UK’s financial markets.
Why Standardisation Matters
Improved Transparency and Comparability
By unifying reporting across governance, strategic integration and emissions metrics, UK SRS will allow investors and stakeholders to reliably compare ESG performance across companies. This consistency helps minimise confusion stemming from varied voluntary approaches.
Strengthened Market Confidence
Mandatory and clear sustainability disclosures enable investors to make informed decisions, shifting capital more efficiently to sustainable enterprises. This reinforces confidence in the legitimacy of UK companies’ ESG credentials and helps combat greenwashing.
Embedding ESG Into Boardroom Strategy
UK SRS emphasise embedding sustainability into governance and strategic decision-making. Companies are expected to integrate ESG risks and opportunities into capital allocation and executive performance metrics, transforming ESG from a peripheral consideration to a core strategic concern.
Encouraging Implementation and Innovation
Like the global ISSB standards, UK SRS have been designed to drive action. The requirement for transition plans, scenario analysis and real emissions disclosure pushes companies to move beyond rhetoric towards tangible change. Firms that proactively align their strategies and systems now will be better positioned for future regulatory expectations and stakeholder trust.
Conclusion
The UK Sustainability Reporting Standards are a landmark development in ESG reporting. They interlace global best practice from the ISSB with UK-specific refinements to deliver comprehensive, structured, and comparable disclosures. By embedding ESG into corporate governance, requiring detailed emissions metrics, and synchronising sustainability with financial reporting, UK SRS will elevate transparency and integrity across UK businesses. Positioned as a cornerstone of the UK’s sustainable finance ambition, these standards are vital for ensuring that ESG reporting is meaningful, reliable and forward-looking.