The UK Sustainability Reporting Standards (SRS) are due to be published soon. Here’s what to expect from the new standards.
The UK Sustainability Reporting Standards (SRS) represent the adoption of two global sustainability standards into UK law. These international standards are about how businesses should share information on how the climate affects them.
Background
The standards were developed because international bodies, including the Financial Stability Board, recognise the climate as a highly significant source of risk to businesses, as well as presenting some opportunities. On a large scale, ignorance about these risks has the potential to destabilise the global economy. Investors and other decision-makers need this information, which means businesses need to disclose how they see the climate potentially affecting them.
In 2023 the International Sustainability Standards Board (ISSB) issued its first standards on sustainability-related disclosures, known as IFRS 1 and IFRS 2. These aren’t just about the climate but also about environmental sustainability more generally. For example, issues around water use or metal extraction.
The UK is one of many countries that has been working since 2023 to adopt these standards into national law. The UK versions of IFRS 1 and IFRS 2 will be called UK SRS 1 and UK SRS 2, and we expect them to be published very soon.
What to expect from the UK SRS
Every country adopting the IFRS into its national law is aiming to follow it as closely as possible, so the UK Sustainability Reporting Standards will only diverge from the international standards where strictly necessary. Under IFRS 1 and IFRS 2, the information your business shares on its sustainability-related risks and opportunities should be:
- Complete: all sustainability-related risks and opportunities facing the business
- Timely and published at the same time as your related financial statements
- Clear and as easy to understand as possible
- Comparable with similar disclosures from other businesses
- Comparable with previous disclosures from the same business
- Sourced – so an investor knows what you did to get the information and what guidance you followed in presenting it
- Transparent about areas of uncertainty
- Verifiable
The overall goal is for an investor, or anyone else looking into your business, to be able to access all “information about all sustainability-related risks and opportunities that could reasonably be expected to affect the entity’s cash flows, its access to finance or cost of capital over the short, medium or long term.”
If you supply everything the guidance suggests and yet your company’s disclosures are not of a nature that would enable someone to get the full picture, you have not complied with the guidance. IFRS 1 specifically says that in this instance you would be expected to supply additional information.
We expect all the above to be the same in the UK SRS.
How the UK SRS may diverge from international standards
In 2025 the UK government was considering making the UK SRS diverge from the IFRS in four ways. It consulted on these four possible amendments.
A different approach to delayed reporting. While normally the IFRS requires sustainability reporting to be published with your financial statements, IFRS 1 contains an exception for companies in their first year of reporting. To give them more time as they get used to the new rules, they are allowed to publish their climate disclosures later. The UK’s Technical Advisory Committee advises against this because it doesn’t fit with the principle that climate disclosures are material to the financial health of a business and should be embedded with financial statements. Also, in the UK many businesses in scope of the future UK SRS will already be used to be making climate disclosures alongside financial reports as part of their TCFD reporting
Phased implementation of what you disclose. The standards focus on all aspects of sustainability, not just climate. But IFRS 1 allows organisations to just focus on climate for the first year, before doing full reporting in the second year. The UK is considering extending this so that companies get two full years to just report on climate-related risks. It is also considering allowing companies to ignore Scope 3 emissions in the first year.
A choice of standards for industry classification. IFRS 2 requires organisations to use the Global Industry Classification Standard (GICS) when reporting ‘financed emissions’ – that is, emissions that a bank or other lender indirectly causes by funding them. The UK will probably allow companies to use any valid standard. (The ISSB is currently consulting on removing the GICS requirement from IFRS 2 anyway.)
Not having an ‘effective date’. The international standards specify ‘for annual reporting periods beginning on or after 1 January 2024.’ The UK government is considering not having an effective date because once the UK SRS is published, anyone can use it on a voluntary basis at any time.
Timeline
The UK SRS 1 and 2 were originally supposed to be published last year, but we are now expecting them to come out in the next month or so (February or March 2026). This won’t immediately have an impact on UK business because the UK SRS isn’t a regulatory scheme in itself, but a set of standards for regulatory schemes to follow in future. But we can expect existing regulations to be evaluated and updated in the light of the new standards.
As ever, the Energy Advice Hub is here to help businesses make sense of it all. For more information on the UK SRS and how it will affect your business, get in touch with Sustainable Energy First.
