Reporting and management systems EWSNI
UK Sustainability Reporting Standards and climate disclosures
The UK Sustainability Reporting Standards, UK SRS S1 (general sustainability) and S2 (climate), are the UK's endorsed versions of the ISSB standards, published on 25 February 2026. The FCA's final rules (PS26/19) require UK-listed companies to report against them on a comply-or-explain basis for financial years beginning on or after 1 January 2027, with reliefs that phase out by 2029. Large private companies already make climate-related financial disclosures under the Companies Act and may be brought into UK SRS later.
At a glance
- Who must comply
- UK-listed commercial companies (equity shares in commercial companies, secondary listings, depositary receipts and transition categories) under the FCA rules; large companies and LLPs under the Companies Act climate disclosure regulations.
- Thresholds
- FCA rules: by listing category, not size. Companies Act climate-related financial disclosures: more than 500 employees and turnover over £500 million (or traded, banking or insurance companies with more than 500 employees).
- Next key date
- 1 January 2027: FCA UK SRS rules apply to financial years beginning on or after this date; first reports published in 2028.
- Regulator
- Financial Conduct Authority (listed companies); Department for Business and Trade and the Financial Reporting Council (Companies Act reporting).
- Maximum penalty
- FCA enforcement under the Listing Rules (public censure, unlimited fines, suspension); Companies Act offences for defective strategic reports (fines) and court-ordered revision.
- Where to do it
- In the annual financial report (listed companies) or the strategic report (Companies Act), filed with the FCA's National Storage Mechanism and Companies House.
This probably applies to you if
- Your company's equity shares are listed on the London Stock Exchange's main market or you have a UK secondary listing or depositary receipts
- You are a UK company or LLP with more than 500 employees and turnover over £500 million (climate-related financial disclosures)
- You are a subsidiary or supplier of a listed company and will be asked for emissions, risk and transition data
- You already report under TCFD and need to move to the UK SRS S2 format
- You bid for contracts or finance where lenders and buyers ask for ISSB-aligned disclosures
What UK SRS S1 and S2 are
The International Sustainability Standards Board (ISSB) issued IFRS S1 (general requirements for sustainability-related financial disclosures) and IFRS S2 (climate-related disclosures) in 2023. The UK government endorsed them with limited amendments and published UK SRS S1 and UK SRS S2 on 25 February 2026, available for voluntary use from then. They require disclosure of governance, strategy, risk management, and metrics and targets, including Scope 1, 2 and 3 greenhouse gas emissions, climate scenario analysis and the financial effects of sustainability risks and opportunities. Publishing a standard does not itself make anyone report; the duty comes from FCA rules or company law.
The FCA rules for listed companies
The FCA's policy statement PS26/19, published on 30 September 2026, and the UK Listing Rules (Sustainability Reporting Standards Disclosure) Instrument 2026 require in-scope issuers to disclose in line with UK SRS on a comply-or-explain basis:
| Financial years beginning on or after | Requirement |
|---|---|
| 1 January 2027 | S2 climate disclosures; limited S1 "conceptual foundation" disclosures; reliefs: Scope 3 may be omitted in year one, pre-existing GHG measurement methods may be kept for a year, no comparatives in the first year, non-climate S1 disclosures deferred |
| 1 January 2028 | S1 and S2 comply or explain; Scope 3 relief ends; the climate-first relief for non-climate S1 content still available |
| 1 January 2029 | Full comply or explain with all reliefs expired |
Issuers of equity shares in commercial companies must also say whether they have published a climate transition plan, where it can be found, or why not; there is no duty to have one. Third-party assurance is not required, but if obtained its provider, scope, level and standard must be disclosed. The rules replace the TCFD-based Listing Rule requirements. Investment funds, shell companies and debt-only issuers are out of scope.
Transition plans and assurance
The government consulted in 2025 on requiring transition plans from the largest companies and financial institutions, in line with the Transition Plan Taskforce framework, and on a registration regime for sustainability assurance providers. As at October 2026 neither has been legislated: the FCA rules require only a statement about whether a plan exists, and assurance remains voluntary but disclosed. Companies should expect investors and lenders to ask for both regardless.
A readiness timeline, step by step
Confirm which regime applies
Listing category for the FCA rules; employee and turnover tests for the Companies Act disclosures; group and subsidiary coverage.
Gap-assess against UK SRS S2
Compare your current TCFD or climate disclosures with S2's governance, strategy, risk, metrics and targets requirements, including Scope 3 and scenario analysis.
Build the emissions inventory
Scope 1 and 2 from your SECR data, then Scope 3 categories in order of materiality; document methods and controls so the data can withstand assurance.
Run the 2026 dry run
Prepare a shadow S2 report on 2026 data so that the first mandatory report for 2027 is a refinement, not a first attempt.
Decide on the transition plan and assurance
Agree whether to publish a plan and what assurance to obtain, and disclose both as the rules require.
How this fits with SECR and ESOS
SECR remains a separate legal duty in the directors' report (proposed to move elsewhere in the annual report), and ESOS remains a separate four-yearly audit. UK SRS reporting draws on the same energy and emissions data, so the efficient approach is one data set with one set of controls serving SECR, ESOS, the Companies Act disclosures and UK SRS.
How it differs across the UK
- E England
UK-wide company law and FCA rules apply identically; no national differences.
- W Wales
UK-wide company law and FCA rules apply identically; no national differences.
- S Scotland
UK-wide company law and FCA rules apply identically; no national differences.
- NI Northern Ireland
UK-wide company law and FCA rules apply identically; no national differences.
Key dates
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FCA UK SRS disclosure rules apply to financial years beginning on or after this date (first reports in 2028)
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Possible extension of UK SRS to large private companies through company law (consultation expected)
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UK SRS: Scope 3 relief ends for financial years beginning on or after this date
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UK SRS: all transitional reliefs expired; full comply-or-explain against S1 and S2
Dates marked “Proposed” are announced or consulted on but not yet law. See the full deadlines calendar.
Penalties and enforcement
| Breach | Penalty | Applies in | |
|---|---|---|---|
| Listed company failing to comply with the Listing Rules' sustainability disclosure requirements | FCA enforcement: public censure, financial penalties without statutory limit, or suspension of listing | EWSNI | Source |
| Directors approving a strategic report that does not contain the required climate-related financial disclosures | Criminal offence with a fine on conviction; court may order a revised report at the directors' expense | EWSNI | Source |
Compliance checklist
Where to do it: official services
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UK Sustainability Reporting Standards
Guidance
The published UK SRS S1 and S2 and the government's endorsement decisions. Department for Business and Trade EWSNI
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FCA PS26/19: aligning listed issuers' sustainability disclosures with international standards
Guidance
The final rules, scope, reliefs and timetable for listed companies. Financial Conduct Authority EWSNI
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Climate-related financial disclosures: guidance for companies and LLPs
Guidance
Non-binding guidance on the Companies Act climate-related financial disclosure requirements. Department for Business and Trade EWSNI
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National Storage Mechanism
Report or submit
Where listed companies file annual financial reports containing their disclosures. Financial Conduct Authority EWSNI
The law behind this
Questions people ask
Is UK SRS mandatory?
For UK-listed companies in the FCA's scope, yes, on a comply-or-explain basis for financial years beginning on or after 1 January 2027 under PS26/19, with the first reports published in 2028. For other companies UK SRS is voluntary; large companies already make climate-related financial disclosures under the Companies Act, and the government has said it will consult on extending UK SRS to them.
What is the difference between UK SRS S1 and S2?
S2 covers climate: governance, strategy, risk management, metrics and targets including Scope 1, 2 and 3 emissions and scenario analysis. S1 sets the general framework for disclosing any material sustainability-related risks and opportunities, climate or otherwise. The FCA rules apply S2 first, with a climate-first relief that lets companies defer non-climate S1 disclosures for two years.
Do I have to report Scope 3 emissions?
Under the FCA rules, Scope 3 can be omitted in the first reporting year (financial years beginning in 2027) and must be disclosed, or its omission explained, from financial years beginning on or after 1 January 2028. The Companies Act climate disclosures and SECR do not require Scope 3, but investors increasingly expect it.
Does the FCA require a transition plan?
No. Issuers of equity shares in commercial companies must state whether they have published a climate transition plan, where it is, or why they have not, but there is no requirement to produce one. The government's separate proposal to require transition plans from the largest companies has not been legislated.
Is assurance of sustainability reports required?
Not under the FCA rules, which require only that any assurance obtained is disclosed with its provider, scope, level and standard. The FCA is keeping mandatory assurance under review, and the government has consulted on a registration regime for assurance providers. Building audit-ready data now avoids rework if assurance becomes mandatory.
Terms used in this guide
- UK SRS
- The UK Sustainability Reporting Standards, S1 (general) and S2 (climate), the UK-endorsed versions of the ISSB's IFRS S1 and S2, published on 25 February 2026.
- ISSB
- The International Sustainability Standards Board, which issues the global baseline sustainability disclosure standards the UK SRS are based on.
- Comply or explain
- A requirement to make the disclosures or explain publicly why they have not been made; the basis of the FCA's UK SRS rules.
- Scope 3 emissions
- Indirect emissions in a company's value chain, upstream and downstream, which UK SRS S2 requires after a one-year relief.
- Transition plan
- A company's plan for moving to a lower-carbon business model; listed companies must say whether they have published one.
- TCFD
- The Task Force on Climate-related Financial Disclosures framework that UK listing and company-law disclosures were based on before UK SRS.
Sources
- FCA PS26/19: aligning listed issuers' sustainability disclosures with international standards
- FCA finalises UK SRS-aligned sustainability disclosure rules for listed issuers, A&O Shearman (8 October 2026)
- Ready, set, report: the FCA fires the starting gun on UK sustainability reporting, Travers Smith (February 2026)
- UK Sustainability Reporting Standards collection, GOV.UK
- Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022
- Modernising corporate reporting consultation, September 2026
Reviewed 14 October 2026. If you spot something out of date, email info@thamesenvironment.com.