A practical guide to UK sustainability reporting standards (UK SRS)

On 25 June 2025, the UK Government confirmed the launch of the UK Sustainability Reporting Standards (UK SRS). The consultation on draft UK SRS S1 and S2 closed on 17 September 2025, with feedback now shaping the final rules. Those final rules are expected in the months ahead.

Based on the ISSB’s IFRS S1 and IFRS S2, the UK SRS will form the backbone of the country’s corporate reporting regulations. They aim to align UK disclosures with the global baseline while tailoring requirements to domestic priorities such as transition planning.

Below, we break the UK SRS into clear, easy-to-understand blocks to highlight what matters most and how your company can prepare.

The building blocks: IFRS S1 and S2

To understand the UK SRS, we need to revisit the ISSB’s global standards.

• IFRS S1 sets out the general framework for sustainability-related financial disclosures. It requires companies to disclose material information about sustainability-related risks and opportunities that could reasonably affect enterprise value over the short, medium or long term. Where no topic-specific standards exist, S1 still applies.

• IFRS S2 focuses on climate disclosures. It builds on the TCFD’s four pillars—governance, strategy, risk management, and metrics and targets—and requires reporting on climate risks, greenhouse gas emissions (including Scope 3), scenario analysis, and financed emissions.

The ISSB’s goal is to establish a global baseline. The UK supports this aim and has introduced targeted amendments to reflect domestic regulatory and market needs.

The six amendments in the UK SRS

The UK Government, supported by expert technical and policy committees, has proposed the following changes to the ISSB standards in this consultation.

1. No fixed effective date
   The UK SRS removes the default ISSB effective date of 1 January 2024. Instead, implementation timing will be determined through future regulation. This allows the UK to align adoption with its broader corporate reporting reform agenda.

2. Extension of ‘climate-first’ transitional relief
   IFRS S1 allows firms to report only on climate for their first year. The UK extends this to two years, recognising the need for a phased approach to reporting beyond climate.

3. Removal of delayed reporting relief
   The UK SRS eliminates the ISSB’s one-year grace period that allowed sustainability disclosures to be published later than financial statements. UK entities will be expected to report on the same timeline, supporting stronger integration.

4. GICS requirement removed
   UK SRS allows entities to use classification systems other than GICS for reporting financed emissions. This avoids costs and delays of reclassification and supports consistency with firms’ existing reporting practices.

5. SASB references made optional
   The ISSB language “shall refer to and consider” SASB standards is replaced with “may refer to and consider.” This change reflects concerns about over-reliance on legacy US-centric guidance.

6. Transition reliefs tied to mandatory use
   The UK clarifies that transition reliefs will apply only when reporting becomes legally required. Voluntary adopters can still use the reliefs, but the UK will not define their scope in that context.

These amendments are not deviations for their own sake. They aim to strike a balance between global comparability and UK-specific coherence, especially in relation to legal structure, investor expectations, and the country’s existing TCFD-aligned requirements.

The UK SRS compared to the ISSB’s IFRS S1 and S2

The table below highlights how the UK SRS modifies the ISSB’s IFRS S1 and S2, and the rationale behind each change.

What firms should do now

While the UK SRS are not yet mandatory for all companies, the direction of travel is clear. Here are seven steps firms can take to prepare:

1. Review current disclosures – benchmark existing reporting against IFRS S1 and S2 and identify gaps in relation to the proposed UK SRS amendments.

2. Strengthen transition planning – prepare for transition plan disclosure by aligning with the TPT framework, which is expected to serve as the UK reference point.

3. Strengthen governance and board oversight – embed sustainability and climate risks governance explicitly at board level, ensuring senior leadership engagement and accountability compatible with UK SRS principles.

4. Improve Scope 3 readiness – enhance data collection, quality, and assurance processes for Scope 3 greenhouse gas emissions; conduct scenario analysis to demonstrate resilience under climate-related uncertainties.

5. Develop scenario analysis capability – apply credible, widely recognised climate scenarios and link outputs directly to financial planning.

6. Integrate sustainability and financial reporting – work towards integrated reporting that combines financial data and sustainability disclosures, providing a coherent picture of financial risks and sustainability impacts to investors.

7. Set a phased disclosure roadmap – create a clear timeline and roadmap to progressively expand disclosure scope and data quality enhancements; communicate plans to stakeholders to build confidence and transparency.

The UK SRS mark a decisive move towards globally aligned, mandatory sustainability reporting. For companies, this is a chance to demonstrate resilience and credibility in the transition to a low-carbon economy. Firms that act early will be better positioned to manage risks, attract capital, and meet the expectations of regulators and investors alike.

This article is also published on Substack. illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.

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