No more delays on the UKSRS line…

Making the UK the sustainable finance capital of the world

In a move to position the UK as a global leader in sustainable finance, the Labour Government unveiled a trio of public consultations during London Climate Action Week. Announced on 25^th June, these consultations are designed to address concerns around the UK’s fragmented corporate reporting framework, whilst also ensuring that current and prospective investors have consistent and quality data. We previously addressed this fragmented reporting landscape in our article ‘Mind the reporting gap’.

This phase is part of a broader reform program linked to the Government’s Mansion House initiatives. The central premise of this effort is to reduce the regulatory burden on businesses by 25%, primarily by simplifying and consolidating overlapping disclosure requirements. The consultations come in response to both global developments, such as the EU’s omnibus reforms, and the UK’s own desire to attract investments. Rather than imposing new requirements across the board, the proposals are targeted at the most economically significant firms.

Good things come in threes

The Government launched three interlinked consultations, open for public comment until 17^th September 2025. Together, these proposals represent a foundational step towards a modernized UK reporting framework. The consultations include:

• UK Sustainability Reporting Standards (UK SRS): Exposure drafts setting out the proposed approach to corporate sustainability disclosures, largely aligned with the International Sustainability Standards Board (ISSB).
• Climate-related Transition Plan Requirements: Seeking views on how to implement routes for transition plan requirements in line with mandating UK-regulated financial institutions and FTSE 100 companies.
• Assurance of Sustainability Reporting: Aimed at strengthening trust in reported data by introducing regulatory oversight of third-party assurance services for sustainability-related financial disclosures.

While an implementation timeline has not yet been set, the Government intends to provide a roadmap in future publications. For now, the UK SRS is expected to be available for voluntary use following the consultation. However, further consultations will explore whether the disclosures should become mandatory.

We can also expect a review of existing non-financial reporting requirements under the Companies Act 2006, as signalled by the Secretary of State for Business and Trade in October 2024.  The legislative timeline is likely to take some time. However, it is possible that the Financial Conduct Authority (FCA)  may move faster as it does not have the same primary legislative processes.

Following the draft UKSRS and climate-related transition plan requirements, the FCA is preparing its own set of consultations expected in Q3 2025. It is presumed that these will focus on:

• Transitioning listed company climate disclosures from the current TCFD-aligned approach to the UK-endorsed version of IFRS S2;
• Enhancing expectations around transition plans;
• Aligning Sustainability Disclosure Requirements (SDR) for asset managers with the UK SRS and the Transition Plan Taskforce (TPT) framework.

The public consultations

Exposure Drafts: The UK Sustainability Reporting Standards (UK SRS)

The UK SRS are tailored versions of the IFRS S1 and IFRS S2 standards adapted to meet UK-specific needs. These standards focus on sustainability-related disclosures aimed at investors, helping them assess risks and opportunities. The UK Government, following joint advice from the Technical Advisory Committee (TAC) and the Policy and Implementation Committee (PIE), has proposed six amendments and is seeking feedback on whether the use of the standards should become mandatory.

The six proposed amendments are as follows:

• Amendment one: removal of the transition relief in IFRS S1 that permits delayed reporting in the first year: UK SRS removes the ISSB’s provision allowing sustainability disclosures to be published later than financial statements in the first year to preserve alignment and connectivity.
• Amendment two: extension of the transition relief in IFRS S1 that permits a ‘climate-first’ approach: Entities may report only climate-related information (under S2) for the first two years, delaying full sustainability reporting (under S1).
• Amendment three: removal of the requirement to use the Global Industry Classification Standard (GICS) in IFRS S2: The requirement to use the GICS system for financed emissions is removed; entities may use any recognised classification system.
• Amendment four: removal of the ‘effective date’ clauses in IFRS S1 and IFRS S2: references to fixed effective dates are deleted; UK application dates will be set through UK legislation or regulation.
• Amendment five: references to the SASB materials in IFRS S1 and IFRS S2: Entities may (rather than shall) refer to SASB materials in identifying relevant topics and metrics.
• Amendment six: treatment of transition reliefs: Transition reliefs apply from the start of any mandatory requirement, not from the point of voluntary use.

The Government also acknowledges timing challenges with financed emissions disclosure as organisations often calculate these using data from the previous reporting period. The Government also seeks views on whether the disclosures around carbon credits should be strengthened. 

Climate-related Transition Plan Requirements and Assurance of Sustainability Reporting

The UK Government is also consulting on climate-related transition plan requirements and assurance of sustainability reporting to enhance accountability and data reliability.

One approach under consideration is a “comply or explain” model, which gives companies flexibility to either publish a transition plan or justify why they haven’t. A stricter “develop and disclose” model would mandate structured transition plan publication, while an “implement” model would further require firms to demonstrate progress with liability limited to misrepresentation or procedural failure.

Plans must align with the UK’s net-zero 2050 target, potentially requiring interim targets and scenario analyses at 2°C and 4°C. Nature-related risks and biodiversity impacts may also need to be incorporated. On assurance, the Government proposes a voluntary registration regime for sustainability assurance providers under ARGA who would adhere to the draft ISSA 5000 standard. Input is being sought on making assurance mandatory for UK SRS disclosures, which could improve data quality but increase compliance costs.

Scope and timeline

It cannot yet be said for certain who will fall under scope if the UKSRS and Transition plans were to become mandatory. The Government has committed to applying transition plan requirements to UK-registered financial institutions and FTSE 100 companies. The consultation suggests broader application under the UKSRS may be possible.  

Mandatory UK SRS disclosures are being considered for “economically significant” companies, which will typically include, if using the definition from the Companies Act, those with 500+ employees and £500 million or more in annual turnover, as well as large pension schemes. At the same time, the FCA is expected to consult on extending reporting requirements to listed companies, likely shifting from the current TCFD-based framework to the UK-endorsed IFRS S2. However, SMEs are currently not expected to fall under scope.

Following the closure of the UK SRS consultation on 17^th September, the Government intends to release the finalised standards in the autumn, with the initial phase allowing for voluntary adoption. Encouragingly, the consultation suggests a comprehensive and forward-looking approach, with recognition that existing reporting requirements may need to be revised or retired to accommodate a streamlined, modern framework.

How to start preparing

• Tailor disclosures to UK investors: Customize reporting to meet the expectations of UK investors, regulators, and partners.
• Review and improve practices: Assess current reporting, identify gaps, and enhance processes for clarity and efficiency.
• Align early with UK standards: Begin aligning with UK SRS (IFRS S1/S2) and TPT by disclosing Scope 1–3 emissions and a clear transition strategy.
• Address governance and materiality: Conduct a materiality assessment and ensure governance supports climate-related disclosures.
• Monitor developments and consider voluntary alignment: Stay updated on UK and global regulations; consider early voluntary alignment to stay ahead.
• Plan for dual compliance if needed: If operating in multiple jurisdictions, coordinate UK and EU (e.g. CSRD) compliance to avoid duplication.

How Position Green can help

Position Green has a strong team located in its London office. With expertise across sustainability compliance, value creation, and reporting, we are on hand to help you at any point in your journey.

Advisory services

• Strategising & planning:
  Our advisors work closely with you to integrate sustainability into your corporate strategy, governance, and operations in line with UK SRS and TPT expectations, all to ensure lasting value beyond compliance.
• Reporting:
  We help simplify the evolving UK reporting landscape by aligning your disclosures with UK-endorsed ISSB standards and TPT guidance. Our expertise ensures you meet compliance while enhancing impact.

Software platform

With Position Green’s Carbon Accounting module, you can:

• Easily measure, report, and reduce CO2 emissions across all scopes in line with IFRS S2
• Model multiple decarbonisation pathways and track SBTi-aligned progress with confidence
• Build board-ready scenarios that turn Net Zero ambition into action and set targets in line with global standards such as ESRS and ISSB.