Sustainability Reporting Developments: Frequently Asked Questions
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Introduction
These Frequently Asked Questions (FAQs) provide UK entities with an overview of current developments in sustainability reporting in the UK, as well as relevant standard‑setting activity by the International Sustainability Standards Board (ISSB). This page was last updated on 26 February 2026.
What are UK Sustainability Reporting Standards (UK SRS)?
UK SRS are sustainability disclosure standards that have been issued by the Government for voluntary use in the UK. They are available for use immediately. They consist of:
- UK SRS S1 'General Requirements for Disclosure of Sustainability-related Financial Information', and
- UK SRS S2 'Climate-related Disclosures', which is to be applied together with the relevant provisions of UK SRS S1 when reporting climate‑related information.
They are based on the first two standards issued by the ISSB (known as IFRS® Sustainability Disclosure Standards) with certain amendments which were considered necessary by the Government for use in a UK context.
They can be accessed on the UK Sustainability Reporting Standards page of GOV.UK.
Do UK entities currently need to report against UK SRS?
No. Reporting against the UK SRS is not currently mandatory. However, UK SRS will form the foundation of future regulation or law, if and when reporting requirements are introduced, see below.
What is the International Sustainability Standards Board (ISSB)?
The ISSB was established by the IFRS Foundation to develop a global baseline for sustainability disclosures that meets the needs of investors and financial markets. Its role is to create high-quality standards that enable comprehensive sustainability reporting, addressing the fragmented landscape of voluntary standards with a view to ensuring the availability of comparable and decision-useful information for investors. It aims to do this in a way that facilitates interoperability with disclosure requirements that are jurisdiction specific and/or frameworks aimed at broader stakeholder groups.
What standards has the ISSB issued?
The ISSB issued two standards in 2023. These are IFRS 'S1 General Requirements for Disclosure of Sustainability-related Financial Information (IFRS S1)' and IFRS S2 'Climate-related Disclosures (IFRS S2)', which was revised with targeted amendments by the ISSB in December 2025.
In developing these standards, the ISSB built on the work of market-led reporting initiatives, including for example, the Task Force for Climate‑related Financial Disclosures (TCFD) and Sustainability Accounting Standards Board Standards (SASB Standards).
What are the key elements of UK SRS S1?
Like IFRS S1, UK SRS S1 requires entities to disclose information about sustainability-related risks and opportunities that could affect their prospects. UK SRS S1:
- asks for disclosure of material information about sustainability‑related risks and opportunities together with the financial statements to meet investor information needs
- applies the TCFD architecture (governance, strategy, risk management and metrics and targets) for disclosure of information about sustainability-related risks and opportunities
- requires industry-specific disclosures
- for matters other than climate (UK SRS S2), refers to sources to help entities identify sustainability-related risks and opportunities, and
- can be used in conjunction with any accounting requirements (GAAP).
Further helpful ISSB information and educational resources on IFRS S1, which can help with voluntary application of UK SRS S1 are the Voluntarily applying ISSB Standards—A guide for preparers and Supporting Materials for IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information.
Does UK SRS S1 differ from IFRS S1? And if so, how?
Yes. Whilst the content of UK SRS S1 is largely the same as IFRS S1, the main ways in which it differs from IFRS S1 are:
- The effective date and application of UK SRS S1 will be set out in future UK regulation or legislation, if and when reporting requirements are introduced
- The ‘climate-only’ relief does not have a time limit – permitting an entity to disclose only climate-related risks and opportunities under UK SRS S2 (in conjunction with the relevant parts of UK SRS S1). The application and availability of this relief will instead be set out in UK regulation or legislation, if and when reporting requirements are introduced. For voluntary reporters this means that this relief can be used indefinitely
- There is no transitional relief permitting an entity to report its sustainability-related financial disclosures after it publishes its related financial statements in the first year of reporting
- An entity is not required to disclose comparative information about its sustainability-related risks and opportunities, other than its climate-related risks and opportunities, until the second annual reporting period in which it ceases to apply the ‘climate‑only’ relief
- Provisions on the compliance statement make clear that:
- Entities cannot assert compliance with UK SRS 1 if they have only used it to report on climate-related risks and opportunities, and
- Using the reliefs in UK SRS S2 does not prevent entities from being able to assert compliance with UK SRS S2, so long as they disclose use of these reliefs, and
- Entities are not required to refer to and consider SASB materials when identifying sustainability risks and opportunities and the applicable disclosure requirements but may instead elect to do so.
A complete summary of the differences between UK SRS S1 and IFRS S1 is provided in the Government’s response to its consultation on UK SRS.
What are the key elements of UK SRS S2?
Like IFRS S2, UK SRS S2 sets out requirements for entities to disclose information about climate-related risks and opportunities that could affect their prospects. UK SRS S2:
- incorporates the TCFD recommendations
- is to be used in accordance with UK SRS S1
- requires disclosure of material information about climate-related risks and opportunities, including physical and transition risks, and
- requires industry-specific disclosures.
Further helpful information and educational resources on IFRS S2, which can also help with voluntary application of UK SRS S2 are the Voluntarily applying ISSB Standards—A guide for preparers and Supporting Materials for IFRS S2 Climate-related Disclosures.
Does UK SRS S2 differ from IFRS S2? And if so, how?
Yes. Whilst the content of UK SRS S2 is largely the same as IFRS S2, the main ways in which it differs from IFRS S2 are:
- The effective date and application of UK SRS S2 will be set out in future UK regulation or legislation if and when reporting requirements are introduced
- The application and availability of reliefs, including the relief from disclosing Scope 3 greenhouse gas emissions, which has no time limit, will be set out in future UK regulation or legislation if and when reporting requirements are introduced
- Entities are not required to refer to and consider SASB materials (including the Industry-based Guidance on Implementing IFRS S2), but may instead elect to do so when identifying climate risks and opportunities and the applicable disclosure requirements, and
- In cases when an entity is unable to disclose financed emissions in line with the requirements in UK SRS S2, it is required to explain why, which includes explaining the measurement approach taken.
A complete summary of the differences between UK SRS S2 and IFRS S2 is provided in the Government’s response to its consultation on UK SRS.
If a UK entity uses UK SRS on a voluntary basis and makes use of a relief without a time limit, does this mean that it is entitled to apply the relief indefinitely?
Yes. For reporters who use the standards on a voluntary basis, the Government’s decision to remove the specific time periods means that they can use reliefs without time limits, indefinitely. However, if compliance with UK SRS is made subject to law or regulation, any provisions on relief duration would be governed by those legal or regulatory provisions.
How do UK SRS S1 and UK SRS S2 compare to non‑financial reporting requirements in the UK?
Strategic report requirements relating to sustainability-related matters in the Companies Act 2006 (the Act) have a significant overlap with the content of UK SRS S1 and UK SRS S2. In scope entities are, for example, required to disclose a Non-Financial and Sustainability Information Statement (NFSIS) which includes information about environmental, social, community, human rights, anti‑corruption and anti‑bribery matters (with similar requirements applying to quoted companies). In scope entities are additionally required to provide a description of linked policies, due diligence processes, policy outcomes and principal risks related to these matters, together with relevant KPIs.
NFSIS requirements under the Act also include climate‑related financial disclosure requirements based on the TCFD recommendations. Meanwhile, the Financial Conduct Authority’s (FCA’s) current 'comply or explain' Listing Rules require reporting against the TCFD Recommendations, although the FCA has recently launched a consultation on updating these rules to align reporting with UK SRS (see below). UK SRS S2, which is based on IFRS S2, by contrast, integrates and is consistent with the 4 core recommendations and 11 recommended disclosures published by the TCFD. Differences between IFRS S2 and TCFD are explained in Comparison - IFRS S2 Climate-related Disclosures with the TCFD recommendations.
For further information about strategic reports, see the FRC’s Guidance on the Strategic Report.
If UK entities report using UK SRS S2, will they also need to duplicate NFSIS climate-related financial disclosures under the Companies Act 2006?
No. The Government has confirmed that UK SRS S2 is a national reporting framework and that it will not be necessary for UK entities to duplicate climate-related financial disclosure requirements, under section 414CB(2A) of the Companies Act 2006, so long as use of UK SRS S2 is clearly referenced in the NFSIS, and existing NFSIS requirements relating to climate-related financial disclosures set out in section 414CB (1)-(5) of the Companies Act 2006 are met. This applies regardless of whether UK SRS is applied on a mandatory or voluntary basis. The Government has also said that it intends to update the guidance on climate-related financial disclosures for companies and LLPs to reflect this.
If UK entities report using UK SRS 2, will they also need to duplicate emissions data required under the Streamlined Energy and Carbon Reporting Framework (SECR)?
Currently, yes. However, the Department for Energy Security and Net Zero (DESNZ) will consider in due course how emissions data reported by an entity using UK SRS interacts with SECR, with a view to reducing duplication to the extent possible.
Who is responsible for mandating implementation of UK SRS in the UK?
The Financial Conduct Authority (FCA) is responsible for taking implementation decisions on sustainability reporting requirements as they relate to UK listed companies. The Government is responsible for taking implementation decisions that would apply to UK companies based on a defined scope.
A Policy Implementation Committee (PIC) facilitates coordination of implementation decisions by the FCA and the Government, with its membership drawn from various Government departments and regulators, including the FRC. You can find out more about the PIC on the UK Sustainability Reporting Standards page of GOV.UK.
Is the Government planning to require UK entities to report against UK SRS?
The Government announced in October 2025 that it was undertaking an expanded review of the Modernisation of Corporate Reporting (MCR) covering all aspects of the annual report and accounts with a consultation expected in 2026. The Government is expected to consider whether to introduce legal requirements to report against UK SRS in the future, taking into account feedback from the MCR programme.
Is the FCA planning to require UK listed entities that report against TCFD, to report against UK SRS?
Yes. The FCA has issued a consultation on whether and how to update its Listing Rules to refer to the draft UK SRS. As the final version of UK SRS were unavailable at the time of publication, its consultation refers to draft UK SRS, but the FCA has confirmed that it will reflect UK SRS as finalised in its final rules
The FCA broadly proposes to retain the scope of issuers currently subject to TCFD‑aligned disclosure requirements, but with the application of the requirements differing depending on whether an issuer has a UK primary listing or a secondary listing in the UK. For UK primary listed entities currently subject to TCFD reporting requirements the consultation proposes:
- Mandatory disclosure of climate-related risks and opportunities in line with UK SRS 2 and the specific provisions of UK SRS S1 that are relevant to those disclosures
- A ‘comply or explain’ approach to Scope 3 disclosures under UK SRS S2
- A ‘comply or explain’ approach to disclosures relating to non- climate sustainability-related risks and opportunities
- Transparency around transition plans
- Transparency around any assurance undertaken in relation to UK SRS disclosures, and
- That the rules take effect from 1 January 2027.
Following conclusion of the FCA’s consultation process, it aims to finalise its rules and publish its policy statement in autumn 2026.
What other projects is the ISSB undertaking with regards to sustainability-related disclosures? And what are the expected next steps on these?
The ISSB is working on a range of projects. These include the following:
- Standard‑setting on disclosures about risks and opportunities associated with nature, with an Exposure Draft expected in October 2026
- Completing research on human capital with a view to deciding on whether it is necessary and feasible to undertake standard‑setting in this area, with a decision expected in March 2026, and
- Work on enhancing the SASB materials.
Any new or amended standards that are issued by the ISSB in the future, for example on nature‑related disclosures or human capital would not automatically apply in the UK. They would instead first need to go through the UK’s formal endorsement process, before being incorporated into UK Sustainability Reporting Standards (UK SRS).
You can track the progress and expected timelines for all of the ISSB’s projects on the IFRS Foundation work plan.
What should UK entities do in the light of the above developments?
UK entities may wish to continue to monitor the above developments, in particular, to the extent that they directly relate to the UK. In the meantime, UK entities may also wish to continue to develop their approaches to their sustainability reporting. The IFRS Knowledge hub offers information that can help support voluntary application of UK SRS S1 and UK SRS S2 and the FRC’s climate-linked corporate reporting thematic reviews also offer a helpful source of practical, market-derived information, to assist UK entities with this.