Last updated: 16/03/2026
The UK Government has published UK Sustainability Reporting Standards (UK SRS) S1 and S2, available for voluntary use from 25 February 2026. The standards represent the UK’s adoption of the global ISSB’s IFRS S1 and S2 sustainability reporting baseline, with targeted UK modifications.
The first two published UK Sustainability Reporting Standards are available to view and use. Although adoption is voluntary, the FCA (Financial Conduct Authority) is consulting on replacing TCFD-aligned Listing Rule requirements with UK SRS-based reporting for accounting periods beginning on or after 1 January 2027, subject to the outcome of consultation CP26/5 and final FCA rules. For organisations reporting under TCFD, UK SRS is expected to replace the existing TCFD-aligned disclosure requirements within the FCA Listing Rules.
Why does this matter for UK businesses?
UK SRS integrates sustainability into mainstream financial reporting, meaning sustainability‑related disclosures will be scrutinised with the same rigour as financial statements. As a result, organisations will need clearer governance, stronger data controls and closer linkage between climate impacts and financial performance.
In practice, businesses will need to:
- Demonstrate how climate-related risks and opportunities link to business performance.
- Integrate climate scenarios into budgeting and forecasting.
- Assign formal oversight of sustainability risks at board level.
- Implement internal controls over the collection, validation and documentation of sustainability-related data.
For organisations already reporting under TCFD and SECR, these changes represent an evolution rather than a reset. However, S2 increases the level of detail required. For example, climate risks must be translated into quantified impacts on financial performance, cash flows, capital allocation and balance sheet resilience.
A key feature of the ISSB framework adopted by UK SRS is the requirement for connectivity with financial statements. Therefore, organisations must explain how climate risks, scenario analysis and transition plans affect financial assumptions, asset valuation, impairment testing and future investment decisions.
S1 vs S2: What’s the Difference?
S1 establishes the general sustainability disclosure framework, while S2 applies it specifically to climate‑related risks and opportunities. In other words, S1 sets the rules; S2 applies them.
UK SRS S1 – General Requirements for Sustainability-related Financial Disclosures
S1 establishes the overarching framework. It defines how organisations identify material sustainability-related risks and opportunities, how information should be structured, and how disclosures link to financial statements and risk management processes.
UK SRS S2 – Climate-related Financial Disclosures
S2 applies that framework to climate. It requires disclosures on climate governance, strategy, risk management, and metrics and targets, including scenario analysis, value chain impacts and business resilience.
What Happens Next? Key Dates and Scope
UK SRS can be adopted voluntarily now, but mandatory adoption for listed companies is expected from 2027 (subject to FCA rules). Meanwhile, the government may expand requirements to other large companies.
UK SRS is now available for voluntary adoption. The FCA has proposed replacing TCFD‑aligned Listing Rule requirements with UK SRS‑based reporting starting in 2027, subject to the outcome of its consultation. The government is also considering extending similar requirements across the Companies Act. As a result, even organisations outside the initial scope should prepare for rising expectations.
Supply‑chain impacts are also expected. Therefore, businesses working with listed companies or seeking capital should anticipate requests for UK SRS‑aligned disclosures.
| Milestone | Date | Status |
| Voluntary Use Begins | 25 Feb 2026 | The Department for Business and Trade (DBT) published the final UK SRS on this date for immediate voluntary adoption. |
| Mandatory Application | 1 Jan 2027 | The FCA’s January 2026 consultation (CP26/5) proposes that listed companies apply the standards for periods starting on or after this date. |
| First Reports Due | 2028 | Since the mandate starts for the 2027 fiscal year, the actual reports will be published in 2028. |
| Scope 3 Transitional Relief | 2027–2028 | There is a 1-year transitional relief. While S2 is mandatory from 2027, Scope 3 specifically is “comply or explain” for the first year. |
| Non-Climate S1 “Comply or Explain” | 2027–2029 | The FCA has proposed a 2-year climate-first approach. Full S1 (non-climate) reporting isn’t expected to become fully mandatory until 2029. |
FAQs
Will companies need to report against UK SRS immediately?
Not yet – UK SRS remains voluntary. The FCA is consulting on integrating S2 into the Listing Rules for multiple categories (UKLR 6, 14, 15, 16, 22) and applying S1 on a “comply or explain” basis. Companies may also need to disclose whether their sustainability information has been independently assured.
Should we adopt early?
It depends on your readiness. If you already report Scope 3 emissions or are preparing for CSRD, early adoption may be easier. However, organisations without this infrastructure may prefer gradual alignment to avoid inaccuracies or incomplete disclosures.
How does UK SRS S2 relate to the previous TCFD-aligned disclosure framework?
UK SRS S2 builds on and supersedes the TCFD-aligned disclosure regime. Using the same four-pillar structure -governance, strategy, risk management, and metrics and targets – while introducing more detailed and prescriptive disclosure requirements.
The Task Force on Climate-related Financial Disclosures was formally disbanded in October 2023. Its framework has since been incorporated into the ISSB standards, which the Financial Stability Board characterised as the culmination of the TCFD’s work.
Where will UK SRS disclosures be published?
Companies may include disclosures within the Annual Report or publish a separate report. When separate, it must be released at the same time and include clear cross‑references to maintain connectivity with financial statements.
What are the main differences to CSRD?
UK SRS focuses on financially material sustainability risks and opportunities, whereas CSRD requires broader disclosures under a double‑materiality approach (financial + impact). For dual‑reporters, aligning data processes and mapping overlapping requirements can reduce duplication and ensure consistency across functions.
How McGrady Clarke Supports UK SRS Readiness
For many organisations, the primary hurdle is not a lack of data, but a lack of alignment. Managing SECR, TCFD, and emerging UK SRS requirements in isolation increases the risk of fragmented reporting and inconsistencies with financial statements.
The Government has indicated that it will consider how energy and emissions data reported under UK SRS interacts with existing Streamlined Energy and Carbon Reporting (SECR) requirements, with the aim of reducing unnecessary duplication. In practice, this reinforces the need for organisations to treat these frameworks as part of a connected reporting system rather than separate compliance exercises.
Effective implementation therefore requires integration across governance, finance and sustainability functions. Scope 3 emissions data, climate scenario outputs and financial assumptions must align with strategy, capital allocation and risk management.
McGrady Clarke supports organisations through:
- Structured readiness assessments
- Gap analysis against S1 and S2 requirements
- Review of the linkage between sustainability disclosures and financial reporting processes
- Alignment of SECR, TCFD and UK SRS requirements to avoid fragmented reporting
If you would like to discuss the implications of UK SRS for your organisation, simply contact our team and we will be happy to discuss this with you.
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