UK Releases New Sustainability Reporting Standards

30 Jun

The UK government has released draft versions of its new UK Sustainability Reporting Standards (UK SRS) based on the ISSB standards for sustainability and climate-related disclosures. The new standards include align with ISSB’s S1 (general sustainability-related) and S2 (climate related) but include 6 amendments based on recommendation made by the UK Sustainability Disclosure Technical Advisory Committee (TAC).

UK Proposed Amendments

1. Climate-first relief

The UK SRS purposes a two-year “climate-first” relief, allowing companies additional time to prioritise climate disclosures (S2) before addressing broader sustainability reporting (S1). ISSB’s proposal included a one-year relief period.

2. Alignment with financial statements

The UK SRS removes an ISSB provision that would have allowed delayed sustainability disclosures (by one year). The UK SRS emphasises the importance of aligning disclosures with financial statements.

3. GICS requirements

The UK SRS removes the obligation to use the Global Industry Classification Standard (GICS) in IFRS S2. Firms will be allowed to use other industry classification systems to report financed emissions.

4. Timelines

UK SRS removes the proposed ‘effective date’ clauses in both S1 and S2, allowing UK firms to set their own timelines for application of the standard for annual reporting.

5. SASB

The UK SRS clarifies the use of SASB materials, ensuring they are treated as optional guidance rather than mandatory.

6. Transition relief

The UK SRS proposes adjustments to how transition reliefs are applied, particularly for carbon credit disclosures. The UK has clarified that transition reliefs should apply from the point at which the standards become mandatory, not from when an entity voluntarily adopts them.

Scope

The UK standards are voluntary for now, but the government and Financial Conduct Authority (FCA) are consulting on making them mandatory for certain entities in the future. These include economically significant UK companies such as large listed and unlisted companies, banks, insurers, pensions providers other financial institutions.

Next steps

The government is seeking feedback on the proposed standards and amendments via a consultation which will be open until 17 September 2025. This will seek responses on the costs and benefits of adopting the standards as well as on other impacts and potential further guidance requirements.

Final standards are expected later in 2025.

For more information on the UK SRS, please get in touch.