The UK corporate reporting framework could be much simpler in future, if proposed changes go ahead. The Modernising Corporate Reporting consultation seeks views on a “once-in-a-generation review” of requirements.
Why is the government consulting?
The Department for Business, Innovation, Science and Trade (BIST) has developed a plan to simplify and modernise the reporting requirements for businesses. This means:
- Cutting down on duplicate reporting
- Focusing reporting on what’s relevant to investors
- Simplify the rules around who’s in scope of each scheme
The proposed changes would affect businesses of all sizes and sectors, which is why the government is calling for responses from a wide range of companies.
Changing: size categories for businesses
One of the key changes being proposed is to alter and simplify the business size thresholds for reporting purposes.
Up to now, the Companies Act 2006 has been the basis for categorising companies into “small”, “medium-sized” and so on. But those definitions have become less useful over time, creating a confusing list of exemptions.
The government is now proposing to:
- Create a new “very large” category for the biggest businesses – because some rules only apply to them but they currently don’t have their own category
- Allow medium-sized companies to claim some, or all of the reporting exemptions enjoyed by small companies (including the audit exemption)
- Create a specific category for micro-entities – currently they’re part of the “small companies” regime
- Allow insurers to access the reporting exemptions available for their size – currently insurers can’t get exemptions as a “smaller company” or “micro-entity” even if they’re small enough to qualify
Overall, the aim is to give all SMEs a “lighter regulatory load” while treating large companies in a more targeted way.
Changing: more focus on investors
Corporate reporting is a key source of information for investors. But today’s reporting serves “multiple different audiences and policy objectives”, according to the BIST consultation document.
BIST is proposing re-focusing on the original purpose of providing useful information to investors. This means giving company directors the freedom to report only what they see as financially material information.
What does this mean for the UK SRS?
The UK Sustainability Reporting Standards (SRS) bring the UK in line with global standards. The current consultation doesn’t propose changing them in any way – rather, it proposes altering the Companies Act to align with the UK SRS.
What does this mean for SECR and ESOS?
There are no immediate changes proposed to either SECR or ESOS. But the consultation does ask which areas of energy and carbon reporting should be prioritised “for review or improvement”.
It mentions that the Department of Energy Security and Net Zero (DESNZ) plans to consult on SECR and ESOS later in 2026. This suggests that they could be the target of future reform. SECR has already been the subject of multiple reviews and we wrote in October 2025 that we expect it eventually to be scrapped or updated to be more in line with the UK SRS.
For now, businesses in scope should continue meeting their compliance requirements. Sustainable Energy First can advise on SECR and help with your ESOS Phase 4 compliance.
Details of the consultation
The consultation opened on 7 September and stays open until 30 November 2026. If you would like to take part, BIST asks you to read the consultation documents first and use the online form for your response.