UK Sustainability Reporting Standards (UK SRS): an update

Sustainability reporting is moving quickly from a specialist topic to a mainstream business issue, and the UK Sustainability Reporting Standards (UK SRS) are a key part of that shift. Following their formal adoption by the UK Government on 25 February 2026, the focus is now turning from what the standards are to how they will be applied in practice.

For many UK business owners, finance teams and accountants, the immediate question is what the new requirements will mean for reporting, systems, suppliers and day-to-day decision-making.

Below we explain what the UK SRS mean, setting out what they are, who they apply to, when they are expected to come into force, and the wider impact they may have across the business community. While the standards are aimed primarily at larger and listed entities, SMEs should still pay attention, because sustainability expectations are increasingly flowing down supply chains and into customer and lender requirements.

What are UK SRS?

UK SRS are the UK-endorsed sustainability reporting standards based on the International Sustainability Standards Board (ISSB) standards IFRS S1 and IFRS S2. Their adoption by the UK Government establishes a common baseline for sustainability-related financial disclosures across the UK.

The Financial Conduct Authority (FCA) is expected to implement these standards for listed companies through its Listing Rules, aligning UK reporting more closely with international standards, improving the quality and comparability of information, and reducing duplicated reporting burdens for companies with cross-border obligations.

In practical terms, IFRS S1 covers broader sustainability-related risks and opportunities, while IFRS S2 focuses specifically on climate-related disclosures. While the UK framework is based closely on ISSB standards, the detailed application, including proportionality and transitional provisions, will be set out in FCA rules.

Who they are likely to affect

Based on current FCA proposals, listed companies fall into two broad categories with different requirements.

1. Full UK SRS compliance required

UK-incorporated companies listed on the London Stock Exchange are expected to be required to fully comply with UK SRS. This is estimated to include around 515 companies.

2. Transparency-only requirements

Non-UK companies with secondary listings or depositary receipts on the London Stock Exchange are expected to be subject to a lighter regime. These entities would need to disclose which sustainability or climate reporting standards they follow in their home jurisdiction and where those disclosures can be found, or confirm if none apply. This group is estimated to include around 85 companies.

Certain types of listed entities are not expected to be in scope of these requirements, including closed-ended investment funds, open-ended investment companies, shell companies, issuers of debt securities, securitised derivatives, and warrants or options.

The detailed scope and application remain subject to confirmation in the FCA’s final Listing Rules.

For most SMEs, UK SRS are not expected to apply directly in the near term. However, that does not mean SMEs can ignore them. Larger customers, listed groups, lenders and investors are likely to request sustainability data from suppliers to support their own reporting obligations.

Timing

Although UK SRS have now been formally adopted, their application to listed companies will depend on FCA implementation through the Listing Rules.

The FCA consultation on sustainability reporting requirements ran from 30 January 2026 to 20 March 2026. The FCA has stated that it intends to publish final Listing Rules in autumn 2026.

The first UK SRS-aligned sustainability reports are expected to be published in 2028, based on financial year 2027 data. This implies an effective date of 1 January 2027 for in-scope entities, subject to final rules.

The consultation also refers to transitional reliefs, broadly aligned with those in the ISSB standards. These may include phased requirements for certain disclosures, such as Scope 3 emissions and broader non-climate sustainability information, as well as reduced comparative reporting in the initial period. The exact form of these reliefs will be confirmed in final rules.

Are unlisted companies in scope?

Unlisted companies are not currently in scope for mandatory UK SRS reporting.

However, the UK Government is expected to consult on extending the regime to “economically significant” entities. While no final definition has been confirmed, this is expected to follow a similar approach to existing UK climate-related disclosure requirements, based on revenue and/or employee thresholds.

This means that some larger private companies may come into scope in future phases of implementation.

What the impact looks like

For listed companies, the main impact will be a more formal and standardised sustainability reporting regime alongside annual financial reporting. The objective is to improve transparency around financially material sustainability risks and opportunities while maintaining a proportionate approach.

For finance teams and accountants, this means sustainability information will increasingly need to be treated with the same discipline as financial information. This includes consistent data sources, clear controls, audit trails, and stronger coordination across finance, risk, operations and procurement functions.

While assurance is not currently mandatory, there is growing regulatory and market interest in the use of third-party assurance over sustainability information, and this may become more significant over time.

What it means for SMEs in supply chains

Even where an SME is outside the direct scope of UK SRS, it is likely to feel the effects indirectly.

Large organisations will need supplier data, particularly for Scope 3 emissions, to meet their own reporting requirements. As a result, SMEs are already facing increasing requests for ESG and sustainability information from customers, partners and lenders.

This does not mean SMEs need to implement full reporting frameworks immediately. However, those that begin organising sustainability data early are likely to be better positioned competitively, particularly when bidding for contracts or working with larger organisations

Conclusion

The key message is that UK SRS are not just another reporting requirement for large, listed companies. They form part of a broader shift in how sustainability information is measured, managed and communicated across the economy.

Even businesses outside the direct scope of the rules may be affected through supply chains, procurement processes, financing arrangements and customer due diligence.

For UK businesses, the most effective approach is to start preparing early. This means understanding what data is already available, identifying gaps, and establishing clear ownership within the business. For finance teams and accountants, there is a clear opportunity to help build robust reporting foundations now, rather than reacting to increasing demands from regulators and the market later.

If you have any questions about ESG, sustainability or how it applies to your business, please get in touch with ABGi, and a representative will get back to you to discuss your specific situation.