In February 2026 the Department for Business and Trade released the final versions of the UK Sustainability Reporting Standards, known as UK SRS S1 and UK SRS S2. Together these standards take the UK forward in ensuring that company stakeholders have a comprehensive view of sustainability actions and that organisations demonstrate the connection between sustainability performance and financial health.
Framework structure
The new standards are derived from the International Sustainability Standards Board IFRS S1 and IFRS S2 standards. UK SRS S1 focuses on general disclosures around governance, strategy, risk management, and metrics and targets. UK SRS S2 is dedicated to climate-related disclosures. It builds upon and replaces previous recommendations from the Task Force on Climate-related Financial Disclosures (TCFD) with more granular requirements for reporting climate impacts.
Who needs to comply?
Currently the UK SRS is available for voluntary use by any UK entity that wishes to align its reporting with international best practice. While there is no immediate legal mandate for UK businesses to adopt these standards, and no confirmed date on the horizon when compliance becomes mandatory, organisations would be well advised to assess their readiness now and prepare.
What needs to be reported?
Materiality underpins all UK SRS disclosure requirements. In the context of UK SRS, materiality refers to information that could reasonably be expected to influence the decisions of company investors or lenders. It acts as a filter to ensure that only sustainability risks and opportunities with a potential impact on an organisation’s financial prospects, cash flows, or business model are included in the report.
UK SRS reporting is primarily narrative-driven but must be robustly supported by data. Under UK SRS S1, organisations need to disclose material information related to these four pillars:
- Governance: the governance processes, controls and procedures in place to monitor and manage sustainability-related risks and opportunities.
- Strategy: the approach to managing sustainability-related risks and opportunities.
- Risk management: the processes used to identify, assess, prioritise and monitor sustainability-related risks and opportunities.
- Metrics and targets: organisational performance in relation to sustainability-related risks and opportunities, including progress towards sustainability targets set voluntarily or through other regulatory compliance frameworks.
Under UK SRS S2, companies must disclose information specifically about climate-related risks and opportunities. This includes metrics related to:
- Scope 1, Scope 2, and Scope 3 emissions including the approach to calculation
- Expenditure on and financing of climate-related risks and opportunities including carbon pricing
- Quantifiable impacts of climate-related transition risks, physical risks, and opportunities
- How climate-related considerations are factored into executive remuneration
Organisations must also provide details on their climate transition plans including the assumptions and dependencies involved in reaching net zero targets, results of climate scenario analysis to test business resilience, and any industry- specific metrics that are material to their operations.
One of the most important rules established in the UK SRS is the principle of connectivity. The UK government has explicitly removed the “delayed reporting” relief found in the IFRS. This means sustainability disclosures must be published at the same time as annual financial statements and be written for a reader of general-purpose financial reports. The sustainability and financial data must also align in terms of content and meet the same standards of accuracy and auditability.
How to prepare
UK organisations can begin using the standards at any time. Early adoption of UK SRS demonstrates that an organisation has already integrated climate and sustainability data into its core financial governance, risk management, and strategic planning processes and has targets and metrics in place to monitor progress.
To get ready for UK SRS, organisations can start by:
- Identifying material sustainability and climate-related risks and opportunities
- Strengthening governance and board oversight of ESG topics
- Measuring GHG emissions and committing to net zero targets
How Menzies can help
Menzies ESG Services provides a range of support for sustainability disclosures, whether you’re a mature organisation looking to align to UK SRS for the next reporting cycle or just starting your journey as a responsible business. We can assist by:
- Advising on sustainability reporting, disclosures and internal control frameworks.
- Supporting clients in meeting lender, investor and regulatory expectations.
- Identifying material sustainability risks and opportunities .
- GHG emissions calculation, carbon reduction plans, and net zero strategy.
- Aligning and integrating sustainability and core business strategy.
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