Quick Guide: Key Sustainability Disclosure Regimes: UK SRS

At present, the UK has two main sets of rules for the disclosure of climate change issues by companies – the regime under the Companies Act 2006 (“CA 2006”) and the regime under the UK Listing Rules (“UKLR”). 

The government is consulting on implementation into UK law of the sustainability disclosure standards developed by the ISSB (IFRS S1 and IFRS S2), with some minor changes. This will be done via the forthcoming UK SRS. 

The ISSB standards, and therefore the UK SRS, cover all aspects of sustainability – not just climate change. 

The UK SRS will require new areas of disclosure and will require greater depth of reporting, which will involve additional costs for business.

The UK SRS will require changes to be made to the existing regimes under the CA 2006 and the UKLR.

This is not yet clear but the UK SRS are expected to apply to “economically significant entities”. This is likely to include UK listed companies and may also apply to large private companies and LLPs. The government intends to consult on this in due course. 

The first stage of the consultations is focussed on the draft UK SRS – which will apply initially on a voluntary basis. 

The second stage of the consultations will focus on who will need to comply with the UK SRS and what this means for existing rules under the CA 2006 and UKLR. 

This is not yet clear. See “Next steps” below. 

In June 2025, the UK government launched a consultation on the draft UK SRS – UK SRS S1 and SRS S2. The consultation closes on 17 September 2025.

The government consultation is proposing to make six amendments to the ISSB standards. 

The most significant changes are as follows:

• UK companies would only be required to report on climate issues (rather than all sustainability issues) in the first two years of reporting so that reporting of wider sustainability issues would only start in the third year. 
• Reporting entities can refer to the SASB industry-specific standards if they wish to but are not required to do so.  
• The government proposes to the keep the existing Scope 3 emissions relief in the ISSB standards so that UK reporting entities do not have to report on Scope 3 emissions until the second year of reporting. However, as UK companies are not currently required to report on Scope 3 emissions, this new requirement will be significant when it starts applying. 

The government believes all proposed amendments to the ISSB standards are necessary in the UK context. The government had committed to keeping any amendments to the ISSB standards to the absolute minimum so as not to cause significant divergence from the global standards.  

For more information on the draft UK SRS, see our blog post. 

Reporting on climate and sustainability-related matters will include forward-looking information, including information on the future prospects of the reporting entity, how its strategy will develop over time, and its climate and environmental targets. 

Stakeholders have raised the prospect of legal implications if it later emerges that this information is inaccurate. There could also be implications from any reliance on third-party data, including for example data used to estimate GHG emissions across the value chain.

In section 463 of the CA 2006, there are protective provisions for forward looking information in strategic reports and directors’ reports included in company annual reports. Directors are liable to the company (but not investors) for any loss suffered as a result of any untrue or misleading statement in a report, or any omission, where the director either “knew the statement to be untrue or misleading or was reckless” or knew that the omission was a “dishonest concealment of a material fact”. These provisions should allow for reporting to be made with the best available information and in good faith. 

The UK government is considering whether similar provisions should apply for any reporting requirements that may be introduced for the UK SRS. 

The consultation on the draft UK SRS closes on 17 September 2025. 

If endorsed, the government aims to publish the final versions of the UK SRS S1 and S2 in autumn 2025. 

The decision on whether to introduce mandatory reporting against the UK SRS for economically significant entities (and what changes would need to be made to the existing rules under the CA 2006) will be the subject of a separate government consultation in due course. 

The Financial Conduct Authority (“FCA”) will also consult on what changes would need to be made to the UKLR to reflect the UK SRS. That consultation is expected in Q3 2025.

The UK government created two committees to advise it on endorsement of the ISSB standards: the UK Sustainability Disclosure Technical Advisory Committee (“TAC”), and the UK Sustainability Disclosure Policy and Implementation Committee (“PIC”).

The government will also consider whether to update current climate disclosure rules for pension schemes, in light of the UK SRS. The Department for Work and Pensions will review the existing regulations this year, building on evidence provided by The Pensions Regulator. 

The government has made it clear that any decisions on the UK SRS will need to be aligned with the government’s ambition to reduce the costs of regulation for business by 25%. The objective is to ensure that any new sustainability disclosure requirements generate decision-useful information for investors and other stakeholders, while not being overly burdensome for reporting entities to meet.

There are separate but related UK consultations on transition plans (see our blog post) and on a proposal for greater regulatory oversight of third-party assurance services for sustainability-related financial disclosures (see our blog post). These two consultations are running alongside the consultation on the draft UK SRS. 

The Department for Business and Trade announced in October 20204 plans for an “ambitious” consultation in 2025 on further proposals to simplify and modernise the UK’s non-financial reporting framework, which is not limited to sustainability disclosures.

• Consultation document with drafts of UK SRS

• Blog post - UK consults on draft UK SRS: implementation of ISSB sustainability disclosure standards 
• Quick Guide on ISSB standards
• Quick Guide on UK regime under Companies Act 2006 
• Quick Guide on UK regime under Listing Rules