UK: Government publishes final versions of UK SRS

The differences between the IFRS / ISSB standards and the UK SRS are set out in Annex A to the government response document. 

The main differences are as follows: 

• A reporting entity “may” (rather than “shall”) consider the SASB standards when reporting under the UK SRS.
• The removal of timings including for temporary reliefs, although these may be re-introduced when mandatory reporting requirements are introduced.
• The inclusion of provisions either limiting the ability to make compliance statements or requiring that additional information is included in compliance statements when an entity is relying on reliefs.
• Removing the ability for an entity to report sustainability disclosures after it has published its financial statements.
• Allowing financial institutions to report financed emissions from a different reporting period provided that additional disclosures are made (see more detail below).    

Changes to the consultation version of the UK SRS include the following. 

Removal of time references and clarifying compliance statements when using reliefs

The government have removed specific time references within the UK SRS, in particular regarding how long reliefs for non-climate reporting and for disclosure of Scope 3 emissions will last. 

This means that: 

• Where an entity is disclosing using the UK SRS voluntarily, these reliefs can be used indefinitely. If and when mandatory disclosures using the UK SRS are introduced, it is expected that time periods for relying on reliefs will be included; and
• For those entities that are using the UK SRS, when providing a compliance statement, they:
  • can state compliance with S2 even if relying on exemptions but are required to specify that they are using the exemptions; and
  • cannot state compliance with S1 if relying on the exemption to disclose only climate-related risks and opportunities. 

Financed emissions and allowing the use of prior year data for estimating financed emissions

A mechanism has been included to allow financial institutions to disclosure financed emissions for a different reporting period to that used for the related financial statements. 

This mechanism provides that, where a financial institution determines it is impracticable to reliably estimate financed emissions for the same reporting period,  it shall disclose: 

• the reasons for this;
• the measurement approach, inputs and assumptions it has used to estimate reported financed emissions information; and
• its plan to be able to report financed emission for the same reporting period, including timelines. 

The government has said it will consider the effectiveness of this provision as part of its post-implementation review  “in due course”.

Incorporation of the changes made by the ISSB to IFRS S2

In December 2025, the ISSB published targeted amendments to its climate disclosure standard, in response to challenges to the application of IFRS S2 raised by stakeholders (see ISSB press release).  

The amendments related to the application of GHG emissions disclosure requirements in IFRS S2, including: 

• clarifying that an entity is permitted to limit measurement and disclosure of Scope 3 Category 15 GHG emissions to financed emissions as defined in IFRS S2;
• permitting the use of alternative classification systems - beyond the Global Industry Classification Standard ("GICS") - to disaggregate information about financed emissions;
• clarifying the availability of the jurisdictional relief from using the GHG Protocol Standard, if only part of an entity is required to use a different method for measuring GHG emissions; and
• introducing a jurisdictional relief from using global warming potential values from the latest IPCC Assessment Report for converting GHG emissions.

The amendment relating to the measurement and disclosure of Scope 3 category 15 GHG emissions clarifies that an entity is permitted to limit its measurement and disclosure of Category 15 GHG emissions to financed emissions – being those emissions attributed to “loans and investments” made by the entity to investees or counterparties. For an entity that participates in asset management activities, financed emissions include GHG emissions attributed to assets under management. This indicates that facilitated emissions that are associated with investment banking activities, and insurance-associated emissions that are associated with insurance and reinsurance underwriting activities are not required to be reported. The amendment also clarifies that companies may exclude GHG emissions attributable to derivatives from their reported Scope 3 financed emissions. 

The UK government have incorporated these changes into the final version of UK SRS S2 (which relates to climate disclosures). 

At present, the UK has two main sets of rules for the disclosure of climate change issues by companies – the regime under the CA 2006 and the regime under the UKLR, which are both based on the TCFD (see our Quick Guides here and here on those two regimes). 

The government and the FCA are in the process of replacing these climate disclosure rules with wider sustainability disclosure rules under the UK SRS.  This will require changes to be made to the CA 2006 and the UKLR. 

As mentioned above, the government will consult (in due course) on changes to the CA 2006 to reflect the UK SRS. At this stage it is not yet clear which types of companies will be covered and when the requirements will apply. We will have to wait for the consultation. 

In the meantime, the government has indicated that it will be updating guidance on the climate-related disclosure requirements in the CA 2006 to clarify that companies will not need to duplicate CA 2006 and UK SRS standards, whether they report voluntarily or mandatorily, provided the relevant requirements under section 414CB (1) to (5) of the CA 2006 are met and the use of UK SRS S2 is clearly referenced in the relevant statement.

The FCA is already consulting on changes to the UKLR to reflect the UK SRS.  The FCA is proposing to mandate climate disclosures (in line with UK SRS S2) from 2027, with the exception of Scope 3 emissions, which would be required on a “comply or explain” basis from 2028. Non-climate-related sustainability disclosures (in line with UK SRS S1) would be on a “comply or explain” basis from 2029. Also, in-scope companies would be required to disclose whether they have published a transition plan and if not, the reason why. That consultation closes on 20 March and the FCA aims to publish a policy statement in autumn 2026, with the rules coming into force from 1 January 2027.  For more information, see our previous blog post. 

It is important to note that the UK SRS cover all aspects of sustainability, not just climate change. Therefore, the UK SRS (once it becomes mandatory) will require new areas of disclosure and greater depth of reporting, which will involve additional costs for business.

The government consulted on climate transition plans in June 2025 (see our previous blog post), alongside its consultation on the draft UK SRS. 

However, it has not yet published its response to that consultation so it remains unclear at this stage if transition plans will become mandatory in the UK, and (if so) for which entities and when. We are waiting for the government to announce its next steps on this. 

UK SRS S2 requires disclosure of any climate-related transition plan that an entity has, including key assumptions used to develop such a plan and dependencies on which the plan relies. 

The government, as a part of its consultation on transition plans, included questions on whether UK SRS S2 provides sufficient information on climate mitigation and adaptation/resilience on the contents of transition plans and if not, asked what further information respondents would like to see.  

The FCA, in its consultation on changes to the UKLR to reflect the UK SRS, indicated that it does not consider it appropriate at this stage to mandate transition plans in its changes to the UKLR. Instead, the FCA is proposing to replace the existing TCFD-based guidance on transition plan disclosures with:

• a “disclose or explain” requirement, which would require listed companies to include a statement in their annual report explaining whether they have disclosed a climate-related transition plan, and where it can be found. If they have not published a transition plan, the FCA proposes that companies be required to state why not; and
• guidance stating that listed companies that produce a climate-related transition plan may wish to use the IFRS Educational Material, to encourage international comparability.

For more information on transition plans requirements under various global disclosure regimes, see our Quick Guide on this. 

• UK SRS: FCA proposes mandatory climate disclosures from 2027, except for Scope 3 emissions, for which it is "comply-or-explain" from 2028
• Quick Guide: Key Sustainability Disclosure Regimes: ISSB standards
• Quick Guide: Key Sustainability Disclosure Regimes: UK climate disclosure rules under Companies Act 2006
• Quick Guide: Key Sustainability Disclosure Regimes: UK climate disclosure rules under Listing Rules
• Quick Guide: Key Sustainability Disclosure Regimes: Transition plans