UK Sustainability Reporting Standards – what do they mean and what do businesses need to do to comply?
The UK Sustainability Reporting Standards (UK SRS) are expected to be finalised by the end of Q1 2025.
These new standards will mandate companies to disclose detailed information about their environmental, social, and governance (ESG) impacts including climate-related risks, emissions data, governance practices, and sustainability targets.
Is your business ready?
UK SRS Background
At COP26 in 2021, it was announced that the International Sustainability Standards Board (ISSB) had been formed under the International Financial Reporting Standards (IFRS) Foundation. What followed were two key standards regarding the disclosure of sustainability-related financial information (IFRS S1) and climate-related information (IFRS S2).
These laid the foundation for UK SRS as part of the UK Government’s Green Finance Strategy. Consultations commenced in January 2025, and official implementation of these standards is expected by the end of this period.
UK SRS is central to the Labour government’s wider strategy to improve sustainability across the economy and drive the transition to net zero.
Will your company be impacted by UK SRS?
Yes, if you are listed on the UK stock exchange.
Yes, if you are an economically significant entity – i.e. if your business operates in the finance, manufacturing, energy or retail sectors.
Yes, if you are a large publicly or privately owned business.
What are the new requirements?Â
As mentioned, UK SRS will be broadly aligned to IFRS S1 and S2 requirements.
If you fall into any of the above categories, you will be required to disclose information across a variety of environmental and social risks and opportunities – both related to climate and broader sustainability factors, including:
- Material sustainability risks and opportunities – Information about how sustainability issues affect financial performance and strategy, and meet the needs of stakeholders (investors, lenders, creditors) when making resource allocation decisions.
- Climate-related disclosures – Information covering governance and risk management, and transition planning including disclosures around climate-related risks and opportunities – e.g. emission data and decarbonisation targets, including physical and transition risks.
- Industry-specific metrics – Sector-specific guidance based on the SASB (Sustainability Accounting Standards Board) framework.
- Integration into financial reporting – The inclusion of sustainability disclosures within annual financial reports, including targets.
How can your business prepare for UK SRS compliance?
Consultations are underway, and the government is expected to publish standards in spring 2025. The standards will apply no earlier than accounting periods beginning on or after 1 January 2026.
But that doesn’t mean you have any time to waste – your business must begin preparations now:
- Get informed about the new requirements and what they mean for your business, and engage with all relevant stakeholders to understand their expectations
- Conduct an audit to measure your current compliance with IFRS S1 and S2
- Start building your UK SRS governance strategy – the metrics you need to measure and report on, your targets and how you communicate them
- Put in place monitoring and continuous improvement processes
Take action today!
If your business comes under the umbrella of UK SRS compliance, get in touch with Leverets. Our specialist team can provide the prompt assistance you need to prepare.
Why not also take a look at our guidance note on Sustainability Disclosure Requirements in the UK.
