UK Sustainability Reporting Standards (SRS)

Finalised 25th February 2026

On 25 February 2026, the UK Department for Business and Trade published the final versions of the UK Sustainability Reporting Standards (UK SRS).

The SRS framework is the UK government’s version of the ISSB’s standards IFRS S1 and S2, with the goal of standardising reporting whilst making it relevant to the UK.

As a result, the UK SRS is very closely aligned to the ISSB’s disclosure standards, with minimal alterations, making cross-framework reporting as smooth as possible.

These standards are currently voluntary, but the intention is to consult (date TBD) on changes to the Companies Act 2006 to make UK SRS-aligned disclosure mandatory for certain types of companies, including possibly private companies.

Later in 2025, the government is planning a broad reporting consultation – the Modernising Corporate Reporting programme – of which the SRS forms a part.

SRS – Overall Objective

The SRS require entities to disclose decision-useful information for primary users of general purpose financial reports about sustainability-related risks and opportunities that could reasonably be expected to affect:

Cash flows
Access to finance
Cost of capital
Overall prospects (short, medium and long term)

Overall Architecture

S1 – Framework standard (principles, structure, presentation, materiality, integration).
S2 – Topic standard (climate-specific requirements layered on S1 structure).
Designed for investor-focused, financially material sustainability reporting.
Strong emphasis on linkage to financial planning and capital allocation.
Requires forward-looking analysis and resilience assessment.

Scope

S1: General Sustainability

Applies to all sustainability-related risks and opportunities that could reasonably be expected to affect the entity’s prospects.

S2: Climate

Applies specifically to:

Climate-related physical and transition risks
Climate-related opportunities

Conceptual Foundations (S1)

Disclosures must:

Be relevant and faithfully represent what they purport to represent.
Meet enhancing qualitative characteristics: comparability, verifiability, timeliness, understandability.

Materiality

Information is material if its omission or misstatement could influence users’ decisions.

Reporting Entity

Must align with the same corporate reporting boundary as the company’s financial statements.

Connected Information

Entities must explain connections:

Between sustainability risks/opportunities
Across governance, strategy, risk management, and metrics
Between sustainability disclosures and financial statements

Core Content Structure (S1 & S2)

Both Standards require disclosures structured under four pillars, which are common to ISSB and TCFD frameworks:

Governance

Oversight by board/governance body and management’s role
Responsibilities and competencies
Frequency and nature of reporting
Integration into strategy and remuneration

Strategy

Identified risks and opportunities
Time horizons (short/medium/long term) and definitions
Impacts on business model and value chain
Effects on strategy and decision-making
Current and anticipated financial effects
Resilience of strategy

Additional S2 Requirements:

Distinguish physical vs transition climate risks
Disclose climate transition plan
Mandatory climate-related scenario analysis for resilience

Risk Management

Processes to identify, assess, prioritise and monitor risks
Inputs, parameters, thresholds
Use of scenario analysis
Integration into overall risk management framework
Changes from prior period

Metrics and Targets
S1: General Sustainability Metrics

Metrics required by applicable standards
Entity-specific metrics used to manage risks/opportunities
Definitions, methodologies, assumptions
Targets (legal or voluntary)
Performance and trend analysis
Consistency over time

S2: Climate-Specific Metrics
Entities must disclose cross-industry climate metrics including:

Scope 1, 2 and 3 GHG emissions
(CO₂e), measured using GHG Protocol (unless jurisdiction requires otherwise)
Disaggregation and methodology
Physical and transition risk exposure (amount and % of assets)
Capital deployment toward climate risks/opportunities
Internal carbon price (if used)
Climate-linked remuneration metrics

For climate targets:

Absolute or intensity targets
Scope coverage
Gross vs net targets
Use of carbon credits (if used – with detailed transparency)
Progress and revisions

Financial Effects & Quantification

Both Standards require disclosure of:

Current financial impacts
Anticipated short/medium/long-term impacts
Quantitative information where possible
If quantitative data is not provided:
- Explain why
- Provide qualitative disclosure
- Identify affected financial statement line items

Reporting Requirements (S1)

Report at the same time and for the same period as financial statements
Provide comparative information
Include disclosures within general purpose financial reports
Make an explicit statement of compliance if fully compliant

What are the next steps for listed and large corporates?

While the SRS are currently voluntary, the UK government has confirmed that public companies reporting in accordance with UK SRS S2 will meet their legal requirements to disclose climate-related financial information under the Companies Act 2006, meaning shifting your reporting to the SRS will comply with current legislation and future-proof your business for upcoming mandatory sustainability reporting.

How we can help

At 51 to Carbon Zero, we’re poised to help with:

Horizon scanning, and ascertaining whether your company qualifies for mandatory reporting
Creating your risk and opportunities matrices
Formatting your reports to comply with both SRS and CFD (and IFRS where required)
Hand-holding through your annual audit