UK Sustainability Reporting Standards (SRS): 2026 Guide
ISSB-aligned Standards S1 & S2 Now Published — Mandatory from January 2027
📅 Key Date: UK SRS S1 and S2 published by UK Endorsement Board in February 2026
First reports due: Financial years beginning on or after 1 January 2027
What Are UK Sustainability Reporting Standards?
UK Sustainability Reporting Standards (UK SRS) are the UK's adoption of the International Sustainability Standards Board (ISSB) standards, tailored for the UK market. They represent a fundamental shift from voluntary ESG reporting to mandatory, standardised sustainability disclosures.
UK SRS S1: General Requirements
Foundation standard setting out general requirements for sustainability-related financial disclosures
- Governance structures and oversight
- Strategy for managing sustainability risks
- Risk identification and management
- Metrics, targets and performance
UK SRS S2: Climate Disclosures
Specific requirements for climate-related disclosures aligned with TCFD
- Physical and transition climate risks
- Climate scenario analysis
- Scope 1, 2 and 3 GHG emissions
- Climate transition planning
Who Must Comply with UK SRS?
Listed Companies
Mandatory from January 2027
- • Premium listed
- • Standard listed
- • Dual listed
- • Listed debt securities
Financial Services
Mandatory from January 2027
- • Banks (£5bn+ assets)
- • Insurers (£5bn+ assets)
- • Asset managers (£5bn+ AUM)
- • Pension schemes (£1bn+)
Large Companies
Expected 2029-2030
- • Turnover £500m+
- • 500+ employees
- • High public interest
- • AIM listed (proposed)
Public Interest
Under consultation
- • Energy companies
- • Water utilities
- • Transport operators
- • NHS trusts (large)
Note: Approximately 1,500 UK entities will be in scope for phase 1 (2027), expanding to 3,000+ by 2030
UK SRS S1: General Requirements in Detail
Governance
- •Board oversight of sustainability risks and opportunities
- •Management's role in assessing and managing sustainability
- •Skills and competencies of governance bodies
- •How sustainability is integrated into decision-making
- •Frequency of board sustainability discussions
Strategy
- •Sustainability risks and opportunities identified
- •Impact on business model and value chain
- •Effects on strategy and resource allocation
- •Resilience of strategy to sustainability risks
- •Trade-offs considered in strategic decisions
Risk Management
- •Processes for identifying sustainability risks
- •Assessment and prioritisation methodologies
- •Monitoring of sustainability risks
- •Integration with overall risk management
- •Use of scenario analysis and stress testing
Metrics & Targets
- •Cross-industry metrics required for all
- •Industry-specific metrics where relevant
- •Targets set and progress against them
- •Methodologies and assumptions disclosed
- •Performance against targets with explanations
UK SRS S2: Climate Disclosure Requirements
Physical Climate Risks
- Acute risks (floods, wildfires, storms)
- Chronic risks (sea level rise, temperature changes)
- Location-specific risk assessments
- Supply chain vulnerability analysis
Transition Climate Risks
- Policy and regulatory changes
- Technology shifts and obsolescence
- Market changes and demand shifts
- Reputational considerations
GHG Emissions Reporting Requirements
Scope 1
Direct emissions from owned/controlled sources
Mandatory for all entities
Scope 2
Indirect emissions from purchased energy
Mandatory for all entities
Scope 3
All other indirect emissions in value chain
Mandatory where material
Financial institutions must disclose financed emissions (Category 15 of Scope 3)
Climate Scenario Analysis
Companies must conduct climate scenario analysis using at minimum:
1.5°C Scenario
Aligned with Paris Agreement goals
3°C+ Scenario
Business-as-usual pathway
UK SRS Implementation Timeline
February 2026 - Standards Published
UK Endorsement Board publishes final UK SRS S1 and S2
Q2-Q4 2026 - Preparation Period
Companies prepare systems, governance, and data collection
1 January 2027 - Mandatory Start
First reporting period begins for in-scope entities
Q1 2028 - First Reports Due
First UK SRS reports published (for Dec 2027 year-ends)
2029-2030 - Scope Expansion
Large private companies and AIM-listed entities included
How to Prepare for UK SRS
Assess Current State
- • Gap analysis against S1 and S2
- • Review existing TCFD/SECR reporting
- • Identify data gaps
- • Assess governance maturity
Build Capabilities
- • Establish sustainability governance
- • Implement data systems
- • Train teams on requirements
- • Engage stakeholders
Implement & Report
- • Conduct scenario analysis
- • Develop transition plan
- • Prepare first report
- • Obtain assurance
Recommended Preparation Actions
Immediate Actions (Q2 2026)
- Form sustainability committee at board level
- Appoint Chief Sustainability Officer or equivalent
- Conduct materiality assessment
- Begin Scope 3 emissions baseline
Before January 2027
- Complete climate scenario analysis
- Develop transition plan to net zero
- Implement reporting software
- Dry run UK SRS report preparation
Common UK SRS Implementation Challenges
Challenge
Scope 3 Data Collection
Gathering emissions data from suppliers and customers
Scenario Analysis Expertise
Limited internal capability for climate modelling
Cross-functional Coordination
Aligning finance, sustainability, and operations teams
Technology Infrastructure
Lack of integrated sustainability data systems
Solution
Supplier Engagement Programs
Phased approach using estimates then actual data
External Expert Support
Partner with climate consultants for first analysis
Project Management Office
Dedicated PMO for UK SRS implementation
Phased Technology Rollout
Start with carbon accounting, expand gradually
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