Guide · Where to start
UK sustainability reporting: where to start
UK sustainability reporting is not one duty but several, and where to start depends on whether you are listed, how large you are, what you import and what you put on the market.
The newest piece landed today: the FCA’s final rules in PS26/19 require listed companies to report against UK SRS on a comply-or-explain basis from 2027.
This guide shows how to work out which regimes apply, and what to do first.
Step one
Work out which duties apply
Answer these questions in order; each one points to the regime it decides.
| Question | If yes | Read |
|---|---|---|
| Are your shares or other securities in a UK Listing Rules category (UKLR 6, 14, 15, 16 or 22)? | TCFD-aligned disclosure now; UK SRS on a comply-or-explain basis for periods beginning on or after 1 January 2027 | UK SRS compliance |
| Are you a quoted company, or an unquoted company or LLP exceeding two of £36m turnover, £18m balance sheet and 250 employees? | Streamlined Energy and Carbon Reporting every year | SECR guide |
| Do you have more than 500 employees and are you traded, a bank, an insurer, an AIM company, or over £500m turnover? | Companies Act climate-related financial disclosures | TCFD reporting |
| Will you have at least 250 employees, or turnover over £44m and a balance sheet over £38m, on 31 December 2026? | ESOS Phase 4, due 5 December 2027 | ESOS compliance |
| Do you import aluminium, cement, fertiliser, hydrogen, or iron and steel goods? | UK CBAM from 1 January 2027 | Finance Act 2026 Part 5 |
| Do you supply packaging, with turnover over £1m and over 25 tonnes? | Packaging extended producer responsibility | Circular economy guide |
| Do investors, customers or public-sector buyers ask for your data? | Voluntary disclosure — CDP, science based targets, nature | CDP reporting |
AIM securities are not on the official list, so an AIM company is outside the FCA’s UK SRS rules and is unquoted for SECR under section 385 of the Companies Act.
It can still fall within SECR on size, and within the climate disclosures if it has more than 500 employees.
No UK entity outside the listing categories is required to use UK SRS, and no private-company threshold has been proposed.
The Modernising corporate reporting consultation, open until 30 November 2026, is reviewing the wider annual report.
UK SRS
What the FCA’s final rules actually say
The UK Sustainability Reporting Standards — S1 for general requirements, S2 for climate — are the UK’s endorsement of the ISSB’s standards, which sit in the IFRS Foundation’s Sustainability Standards Navigator.
They were published by the Department for Business and Trade on 25 February 2026, and any UK entity may use them voluntarily.
The FCA’s final rules in PS26/19 adopt a comply-or-explain approach across UK SRS, S2 included: UK SRS S2 is not mandatory.
They apply to listed companies in the UKLR 6, 14, 15, 16 and 22 categories, for accounting periods beginning on or after 1 January 2027, with first reporting in 2028.
Closed-ended investment funds, open-ended investment companies, shell companies and issuers of debt and similar securities are excluded.
A company may take a one-year relief from Scope 3 emissions and a two-year relief from non-climate disclosures under S1, stating that it is doing so.
The policy statement gives no total company count; the FCA’s consultation, CP26/5, estimated that around 600 listed companies would be affected.
What the standards require is covered in the UK SRS standards, and how to prepare in UK SRS reporting guidance.
- 30 Jan 2026FCA consults (CP26/5)
Proposed mandatory UK SRS S2; the final rules chose otherwise.
- 25 Feb 2026UK SRS S1 and S2 published
By the Department for Business and Trade, for voluntary use.
- 30 Sep 2026FCA PS26/19
Final rules: comply or explain across UK SRS.
- 1 Jan 2027Rules apply
Accounting periods beginning on or after.
- 2028First reports
Scope 3 relief for one year; non-climate relief for two.
Sources: FCA CP26/5 · DBT · FCA PS26/19
UK SRS and SECR
Two regimes that keep running side by side
| SECR | UK SRS | |
|---|---|---|
| Legal basis | Companies Act regulations — a statutory duty | Voluntary standards; FCA rules make them comply-or-explain for listed companies |
| Who | Quoted companies; large unquoted companies and LLPs | Any entity voluntarily; listed companies in scope of PS26/19 |
| Content | Energy use, emissions, an intensity ratio and efficiency measures | Governance, strategy, risk management, metrics and targets — S1 general, S2 climate |
| Scope 3 | Quoted: none. Unquoted and LLPs: transport fuel only | Required by S2, with a one-year relief under PS26/19 |
| Scenario analysis | Not required | Required by S2 |
| Transition plan | Not required | Say whether you have one and where (PS26/19) |
| Assurance | Not required | Not required; if obtained, name provider, scope and standard |
SECR does not switch off for a company that starts reporting under UK SRS.
The government has said, in its consultation response, that DESNZ will consider how UK SRS energy and emissions data interacts with SECR, with a view to reducing unnecessary duplication where possible.
The detail is in UK SRS vs SECR.
Step two
First steps, in order
Confirm applicability
Run the questions above against your latest accounts, your listing status and your import and packaging data. Write the answers down.
Diary the dates
31 December 2026 for ESOS qualification, 1 January 2027 for UK SRS and CBAM, and your own accounts filing deadline for SECR.
Build one emissions inventory
Scope 1 and 2 first, on the GHG Protocol, with a Scope 3 screen. SECR, UK SRS, CDP and targets all draw on it.
Put governance on record
Who on the board oversees climate and sustainability, and how it reaches the risk process.
Map what you already disclose
Line up your current TCFD statement or SECR report against UK SRS S2 and note the gaps.
Decide what to explain
If you are a listed company, decide where you will comply and where you will use a relief or explain.
Smaller businesses
If none of the duties applies to you
Most small and medium-sized businesses have no statutory sustainability reporting duty.
The pressure usually arrives through the supply chain: a customer’s CDP supply chain request, a lender’s questionnaire or a public-sector tender.
A basic greenhouse gas inventory, using the government’s conversion factors, answers most of those requests and is the right place to start.
If you want to set a reduction target, the SBTi has a separate SME route with its own eligibility test; see our science based targets guide.
Using UK SRS voluntarily is open to anyone, but it is a substantial standard; start with the inventory and governance, and grow into it.
Getting help
Talk it through before you commit
Everything on this site is sourced to the instrument’s owner, and each guide links the provisions it relies on.
If it would help to talk through where you stand, book a free 15-minute call — there is no charge and no obligation.
Where specialist help is needed, a network of independent specialists exists; our guide to carbon compliance services sets out what to ask any provider.
The latest developments are on the news desk, and the full UK SRS picture starts at the UK SRS overview.
An independent reference on UK sustainability reporting, published by Fractional Quest Ltd.
Not a software product, not a regulated firm, and not a substitute for advice on your own position.
Frequently asked
Questions people ask
Is UK SRS mandatory?
Not in the sense of a flat obligation. UK SRS S1 and S2 were published by the Department for Business and Trade on 25 February 2026 and are voluntary for any UK entity. The FCA’s final rules in PS26/19 require listed companies in the UKLR 6, 14, 15, 16 and 22 categories to report against UK SRS on a comply-or-explain basis for accounting periods beginning on or after 1 January 2027, with first reports in 2028.
Does UK SRS apply to private companies?
No. No UK entity outside the listing categories in PS26/19 is required to use UK SRS, and no private-company threshold has been proposed. The government’s Modernising corporate reporting consultation, open from 7 September to 30 November 2026, is looking at the wider annual report framework.
Does UK SRS apply to AIM companies?
Not through the FCA rules. PS26/19 applies to companies in listing categories of the UK Listing Rules, and AIM securities are not admitted to the official list. An AIM company can still use UK SRS voluntarily, and it may have other duties, such as SECR as an unquoted company and the Companies Act climate disclosures if it has more than 500 employees.
Will UK SRS replace SECR?
Not on current plans. SECR is a Companies Act duty and remains in force; DESNZ’s 2026 review recommends retaining it with amendments. The government has said it will consider how UK SRS energy and emissions data interacts with SECR to reduce duplication, which is a review of overlap, not a decision to merge.
Do SMEs need to report on sustainability?
Most small and medium-sized businesses have no statutory sustainability reporting duty, although packaging rules can reach businesses with turnover over £1 million. In practice many are asked for emissions and sustainability data by larger customers, lenders or public-sector buyers, and preparing a basic greenhouse gas inventory is a sensible first step.
Do we need assurance on our sustainability report?
No UK entity is legally required to obtain sustainability assurance. Under PS26/19, a listed company that does obtain assurance must say who provided it, which disclosures were assured and which standards were used.
Do we need a transition plan?
No UK law requires a company to have a climate transition plan. PS26/19 requires listed companies in scope to say whether they have one and, if so, where it can be found. The government consulted on transition plan requirements in 2025 and has not published a decision.
Sources
Primary sources
Every figure, date and status on this page traces to the instrument’s owner. Secondary commentary is never the source for a number.
- FCAPS26/19: Aligning listed issuers’ sustainability disclosures with international standards
Final rules, 30 September 2026.
- FCAPS26/19 (PDF), ¶¶1.2, 2.37, 2.45, 3.6–3.7, 3.12, 3.14
Comply or explain; transition plan statement; assurance; scope; commencement; reliefs.
- FCACP26/5: the consultation PS26/19 finalises
Estimated around 600 listed companies would be affected.
- Department for Business and TradeUK Sustainability Reporting Standards: UK SRS S1 and UK SRS S2
Published 25 February 2026, for voluntary use.
- Department for Business and TradeUK SRS exposure drafts — consultation response
DESNZ to consider UK SRS and SECR data overlap.
- IFRS FoundationIFRS Sustainability Standards Navigator
IFRS S1 and S2, the global baseline UK SRS endorses.
- legislation.gov.ukSI 2008/410, Schedule 7 Parts 7 and 7A — SECR
Quoted companies, and unquoted companies exceeding two of £36m / £18m / 250.
- legislation.gov.ukCompanies Act 2006, section 385 — quoted companies
Why an AIM company is unquoted.
- legislation.gov.ukCompanies Act 2006, section 414CA — climate-related financial disclosures
More than 500 employees, plus a category or £500m turnover.
- legislation.gov.ukSI 2014/1643, Schedule 1 — ESOS large undertaking test
At least 250 employees, or turnover over £44m and balance sheet over £38m.
- legislation.gov.ukFinance Act 2026, Part 5 — UK CBAM
Commences 1 January 2027 on five sectors’ imports.
- legislation.gov.ukSI 2024/1332, regulation 24 — packaging producers
Small producer: over £1m turnover and over 25 tonnes.
- Department for Business, Innovation, Science and TradeModernising corporate reporting (consultation)
Open 7 September – 30 November 2026.
- DESNZClimate-related transition plan requirements (consultation)
Closed 17 September 2025; no decision published.