UK-listed companies will report against the UK Sustainability Reporting Standards (UK SRS) on a comply-or-explain basis for accounting periods starting on or after 1 January 2027, with first reports in 2028. UK SRS are the UK government’s endorsed versions of IFRS S1 and IFRS S2, with a small set of UK amendments.
UK SRS S2 covers climate-specific disclosure requirements, including physical risk identification, scenario analysis, and a metric that asks for the amount and percentage of assets or business activities vulnerable to climate-related physical risks. UK SRS S1 covers broader sustainability topics, and listed companies can defer its non-climate disclosures for two years.
Below is a complete guide to what the UK sustainability reporting standards require, who must comply, the FCA’s final rules and timeline, and the UK amendments that distinguish UK SRS from IFRS S2.
What Are the UK Sustainability Reporting Standards?
The UK government published UK SRS S1 and UK SRS S2 on 25 February 2026 through the Department for Business and Trade (DBT). These standards are the UK’s endorsed version of IFRS S1 (General Requirements) and IFRS S2 (Climate-Related Disclosures), originally issued by the International Sustainability Standards Board (ISSB) in June 2023.
UK SRS S1 sets the general framework for sustainability disclosure. UK SRS S2 focuses specifically on climate-related risks and opportunities. Both standards are structured around four disclosure pillars inherited from the TCFD framework: Governance, Strategy, Risk Management, and Metrics and Targets.
The standards are currently available for voluntary adoption by any UK entity. Under the Financial Conduct Authority’s final rules, published on 30 September 2026, listed companies apply UK SRS S1 and S2 on a comply-or-explain basis for periods starting on or after 1 January 2027. A one-year relief applies to Scope 3 and a two-year relief to non-climate UK SRS S1 disclosures.
UK SRS replaces the existing TCFD-aligned listing rules that have governed climate disclosure for UK-listed companies since 2021. The transition from TCFD to UK SRS brings more granular requirements, including the paragraph 29(c) metric, which the TCFD’s 2021 guidance suggested and UK SRS S2 requires.
Who Must Comply With UK SRS?
FCA-Listed Companies (Comply or Explain from 2027)
The FCA’s final rules (Policy Statement PS26/19) apply UK SRS, on a comply-or-explain basis, to the same five listing categories covered by the TCFD-aligned rules. These include commercial companies listed under UKLR Chapter 6, secondary listings under UKLR 14, depositary receipts under UKLR 15, non-equity and non-voting equity shares under UKLR 16, and transition category companies under UKLR 22. Secondary listings and depositary receipt issuers now report against UK SRS directly.
Exclusions
Several categories of listed entities fall outside the rules. Closed-ended investment funds, open-ended investment companies, shell companies, debt and debt-like securities, securitised derivatives, and warrants, options and other miscellaneous securities are excluded. For funds, the FCA places the requirements on the asset manager. Shell companies have no substantial operations, and the FCA judged that extending the rules to debt and similar securities would not be proportionate or effective.
Broader Government Plans
The UK government will decide later whether to require UK SRS for companies outside the FCA’s rules through the Companies Act. Companies in scope of the existing Companies Act climate disclosure rules can meet them by reporting voluntarily against UK SRS S2. Any entity can voluntarily adopt UK SRS S1 and S2 immediately, regardless of listing status or size.
UK SRS Timeline: Key Dates
The implementation timeline spans from the original ISSB standards publication through to the first reporting periods under the FCA’s rules. The FCA consultation on listing rule amendments closed on 20 March 2026, and the FCA published its final rules in Policy Statement PS26/19 on 30 September 2026.
| Date | Event | Status |
|---|---|---|
| June 2023 | ISSB publishes IFRS S1 and S2 | Complete |
| Jun-Sep 2025 | UK consultation on exposure draft | Complete |
| Dec 2025 | ISSB GHG amendments issued | Complete |
| 30 Jan 2026 | FCA publishes consultation CP26/5 | Complete |
| 25 Feb 2026 | DBT publishes final UK SRS S1 and S2 | Complete |
| 20 Mar 2026 | FCA consultation closes | Complete |
| 30 Sep 2026 | FCA publishes Policy Statement PS26/19 | Complete |
| Periods from 1 Jan 2027 | UK SRS S1 and S2 apply, comply or explain (Scope 3 and non-climate reliefs available) | Comply or explain |
| Periods from 1 Jan 2028 | Scope 3 relief ends; Scope 3 comply or explain | Comply or explain |
| Periods from 1 Jan 2029 | Non-climate UK SRS S1 relief ends; comply or explain | Comply or explain |
UK SRS has no first-year timing relief. IFRS S1 paragraph E4 lets an entity publish its first sustainability disclosures after its financial statements; UK SRS S1 removes it, and its paragraph 64 requires reporting at the same time as the financial statements. The UK Technical Advisory Committee (TAC) recommended the removal, and consultation respondents said investors value integrated reporting.
The Four Disclosure Pillars
UK SRS S2 inherits the four-pillar structure from TCFD and IFRS S2. Each pillar contains specific disclosure requirements tied to paragraph references in the standard.
Governance (Paragraphs 5-7): Companies must describe the governance body responsible for overseeing climate-related risks and how climate considerations are integrated into the entity’s strategy, major transactions, and risk management processes.
Strategy (Paragraphs 8-23): Companies must identify specific climate risks (classified as physical or transition), describe their effects on the business model and value chain, quantify financial effects, and assess climate resilience through scenario analysis.
Risk Management (Paragraphs 24-26): Companies must describe the processes used to identify, assess, prioritise, and monitor climate risks. Disclosures must include the data sources and input parameters used for risk assessment.
Metrics and Targets (Paragraphs 27-37): Companies must report seven cross-industry metrics, including greenhouse gas emissions across all three scopes and a quantitative physical risk exposure metric. Paragraph 29(c) requires companies to disclose “the amount and percentage of assets or business activities vulnerable to climate-related physical risks.”
UK SRS S2 carries Paragraph 29(c) verbatim from IFRS S2. The same four definitional questions on amount, denominator, vulnerability, and scope apply. A paragraph-cited walkthrough covers each.
UK Amendments: How UK SRS S2 Differs From IFRS S2
The UK made a small set of amendments to IFRS S1 and IFRS S2. They cover reliefs and their timing, the effective date, compliance statements, financed emissions, the status of the SASB-based guidance, and the ISSB’s December 2025 GHG amendments, which were built in. Paragraphs 22 and 29(c) are unchanged.
| # | Amendment | IFRS S2 | UK SRS S2 | Impact |
|---|---|---|---|---|
| 1 | First-year publication relief (IFRS S1 E4) | Allowed | Removed (UK SRS S1 para 64) | Report at the same time as the financial statements from the first year |
| 2 | Scope 3 and climate-first reliefs | First year only (IFRS S2 C4(b); IFRS S1 E5) | No time limit in the standard (UK SRS S2 C4, C6; S1 E3, E5) | Timing set by the FCA or law; the GHG Protocol relief stays first-year only (C3) |
| 3 | Effective date | 1 Jan 2024 | Removed | Set by the FCA rules or the Companies Act |
| 4 | SASB Standards and Industry-based Guidance | “Shall” refer to and consider | “May” refer to and consider | Using the guidance is optional; material industry-based metrics must still be disclosed |
| 5 | Compliance statements | Explicit and unreserved statement (IFRS S1 para 72); no rule on reliefs | Paras 73A-73B added (UK SRS S1) | A company using the climate-first relief cannot claim compliance with UK SRS S1, and must disclose any relief it uses |
| 6 | Financed emissions | No explain mechanism | Para B59A added | Where financed emissions cannot reliably be estimated for the same period, the entity explains why, its approach, and its plan to catch up |
| 7 | Dec 2025 GHG amendments | Separate amendment | Incorporated at endorsement | Category 15 limited to financed emissions, derivatives exclusion, GWP flexibility, any industry classification system (B62A) |
Most Substantive Change: SASB “Shall” to “May”
The most visible amendment makes the SASB-based industry guidance optional to consider. Under IFRS S2, entities “shall” refer to and consider the Industry-based Guidance on Implementing IFRS S2, which is based on the SASB Standards. UK SRS S2 changes this to “may” in paragraphs 12, 23 and 32, and UK SRS S1 makes the same change for the SASB Standards in paragraphs 55(a) and 58(a).
The change came from the government’s Policy and Implementation Committee. Supporters said the original wording could set an expectation that companies prove to auditors or assurers that they had considered the guidance, and that the SASB materials had not been through the same due process as the ISSB Standards. The amendment does not eliminate industry-specific disclosure obligations. Companies still need to report risks relevant to their sector; they have more flexibility in how they identify those risks.
No First-Year Timing Relief
IFRS S1 paragraph E4 allows entities to publish sustainability disclosures after their financial statements in the first reporting year. UK SRS S1 removes this option. Sustainability and financial reports must be published together from the start. The practical effect is a compressed implementation timeline for companies that have not been voluntarily preparing UK SRS-aligned data.
December 2025 GHG Amendments Incorporated
The ISSB issued amendments to IFRS S2 in December 2025 addressing practical challenges with greenhouse gas reporting. The UK built these directly into the standard at endorsement. Key provisions include limiting Scope 3 Category 15 to financed emissions only (excluding facilitated and insurance-associated emissions), excluding derivatives from financed emissions calculations, and allowing companies to use the GWP values their jurisdiction requires.
Physical Risk Disclosure Under UK SRS S2
The physical-risk paragraphs of UK SRS S2 (10, 13, 22 and 29(c)) match IFRS S2. The one difference is that the industry-based physical-risk metrics in the guidance become optional to consider. Companies familiar with IFRS S2’s physical risk framework can apply the same approach to UK SRS compliance.
The standard defines physical risks as event-driven acute hazards (storms, floods, droughts, heatwaves) and longer-term chronic shifts (precipitation changes, temperature rise, sea level rise, reduced water availability). Companies must say whether each identified risk is physical or transition, assign time horizons (short, medium, long term as entity-defined), and describe where in their business model and value chain the risks are concentrated, for example by area, facility or type of asset.
Scenario analysis (Paragraph 22) requires companies to assess climate resilience using scenario analysis and to disclose whether they used a diverse range of scenarios. Paragraph B12 gives an example: an entity with “heightened exposure to physical climate-related risks might determine that it is appropriate to carry out its analysis using a localised climate-related scenario that takes into account current policies.” Companies must disclose which scenarios they used, the time horizons covered, and the scope of operations included in the analysis.
Paragraph 29(c) represents the most significant step-up from TCFD. Companies must disclose “the amount and percentage of assets or business activities vulnerable to climate-related physical risks.” The TCFD’s 2021 guidance suggested this metric, and UK SRS S2 makes it a requirement: an amount and a percentage. Building it usually needs location-level hazard data.
UK-listed companies moving from TCFD to UK SRS S2 reporting face a step change in quantitative rigor. Platforms like Continuuiti provide 12-hazard, multi-scenario assessment data that turns this from an estimation exercise into a calculation, with flood damage estimates that directly quantify asset-level exposure.
UK SRS vs IFRS S2 vs CSRD: Key Differences
Companies operating across multiple jurisdictions often need to navigate overlapping disclosure requirements. The three major frameworks differ in materiality approach, scope, and specific requirements.
| Element | UK SRS S2 | IFRS S2 | CSRD/ESRS |
|---|---|---|---|
| Materiality | Financial only | Financial only | Double materiality |
| Scope | UK-listed companies | Jurisdiction-dependent | More than 1,000 employees and over EUR 450M net turnover (from FY2027) |
| SASB guidance | Optional (“may”) | Required (“shall”) | Optional source for entity-specific disclosures (IFRS industry-based guidance) |
| Physical risk metric | Para 29(c): amount + % | Para 29(c): amount + % | E1-11 para 39 (revised ESRS) / E1-9 para 66 (2023 text): assets at material physical risk before adaptation, % addressed, net revenue at risk |
| Applies from | Periods from 1 Jan 2027 (comply or explain) | Varies by jurisdiction | FY 2024 (Wave 1); new scope from FY2027 |
| Scope 3 | Comply or explain (one-year relief) | Year-one relief | E1-6 (2023 text) / E1-8 (revised ESRS); phased |
| Assurance | Not required; companies state whether they obtained it | Not specified | Limited (reasonable-assurance step removed) |
UK SRS and IFRS S2 both use financial materiality, focusing on information relevant to investor decision-making. CSRD applies double materiality, requiring companies to report both the financial impact of climate risks on the company and the company’s impacts on people and the environment.
The most practical difference for UK companies with EU operations is scope. From financial year 2027, CSRD applies to EU companies with more than 1,000 employees and net turnover above EUR 450 million. The FCA’s UK SRS rules apply to listed issuers. A dual-listed company may need to satisfy both frameworks, and the IFRS Foundation and EFRAG published joint interoperability guidance in May 2024 to reduce duplication.
For physical risk data, the requirements converge. Both UK SRS S2 (Paragraph 29(c)) and ESRS E1 (E1-11 paragraph 39 under the revised ESRS, E1-9 under the 2023 text) require companies to quantify assets and activities exposed to physical climate risk. Companies building a physical risk data capability for one framework can reuse it across both.
How to Prepare for UK SRS S2 Compliance
The FCA published its final rules on 30 September 2026, and they apply to periods starting on or after 1 January 2027. Companies already reporting under TCFD have a foundation to build on, but several areas require material upgrades.
1. Map the gap from TCFD to UK SRS. Review your current TCFD disclosures against UK SRS S2 paragraph requirements. The most common gaps are quantitative physical risk metrics (Paragraph 29(c)), formal scenario analysis with disclosed methodology (Paragraph 22), and cross-industry emissions metrics across all three scopes.
2. Source physical risk data for Paragraph 29(c). The requirement to disclose amounts and percentages of assets vulnerable to physical risks usually needs location-level hazard data, and the scenarios and time horizons come from your Paragraph 22 analysis. Identify your asset and facility locations, determine which climate hazards are material to each location, and select data providers that can deliver scenario-aligned projections. Read more about how climate risk assessments work in our climate risk methodology documentation.
3. Build Scope 3 readiness. While Scope 3 operates on a comply-or-explain basis from January 2028, data collection and supply chain engagement take time. Starting early avoids a scramble in year two.
4. Integrate climate oversight into governance. UK SRS S2 requires disclosure of how governance bodies oversee climate risks and whether climate considerations factor into remuneration policies. Board-level accountability structures should be formalised before the first reporting period.
5. Plan for assurance. The FCA does not require third-party assurance. Listed companies must state in the annual financial report whether they obtained it and, if so, the provider, what was assured and to what level, and the standard used.
Frequently Asked Questions
Is UK SRS S2 mandatory?
For UK-listed companies, the FCA’s final rules (PS26/19, 30 September 2026) require UK SRS reporting on a comply-or-explain basis for accounting periods starting on or after 1 January 2027, with first reports in 2028. Other entities can use UK SRS voluntarily.
What is the difference between UK SRS and IFRS S2?
UK SRS S2 is the UK-endorsed version of IFRS S2 with a small set of UK amendments. The most substantive change makes the SASB-based industry guidance optional to consider. Other amendments remove the first-year timing relief, incorporate December 2025 GHG amendments, and add UK-specific compliance statement provisions. The core physical-risk paragraphs are the same in both standards.
What is the difference between CSRD and UK SRS?
CSRD uses double materiality, requiring companies to report both the financial impact of climate risks and the company’s impacts on people and the environment. UK SRS uses financial materiality only, focused on investor decision-making. From financial year 2027, CSRD applies to EU companies with more than 1,000 employees and net turnover above EUR 450 million. The FCA’s UK SRS rules apply to UK-listed companies. The Commission adopts the ESRS under the CSRD as delegated regulations, and UK SRS S1 and S2 follow IFRS S1 and S2 with a small set of UK amendments.
Does UK SRS replace TCFD?
Yes, for listed companies. The FCA’s final rules replace the TCFD-aligned listing rules (such as UKLR 6.6.6R(8)) for periods starting on or after 1 January 2027. The TCFD disbanded in October 2023, and the IFRS Foundation took over its monitoring role from 2024. Companies currently reporting under TCFD will need to upgrade to the more granular UK SRS requirements.
What is UK SRS S1 vs S2?
UK SRS S1 covers general sustainability disclosure requirements beyond climate. UK SRS S2 focuses specifically on climate-related risks and opportunities. Listed companies apply both on a comply-or-explain basis from periods starting 1 January 2027. During the two-year relief they can report on climate only, applying UK SRS S1 only as it relates to climate.
Who does UK SRS apply to?
The FCA’s rules apply to UK-listed companies in five categories: commercial companies, transition category companies, non-equity and non-voting equity shares, secondary listings and depositary receipts. Investment funds, shell companies and debt securities are excluded. The government will decide later on Companies Act requirements for other companies.
What data do I need for UK SRS S2 physical risk disclosure?
Paragraph 29(c) requires the amount and percentage of assets or business activities vulnerable to climate-related physical risks. Meeting this requirement needs location-level hazard data covering acute risks (floods, storms, heatwaves) and chronic risks (temperature rise, sea level rise, water stress). The scenarios and time horizons come from the Paragraph 22 scenario analysis, which assesses climate resilience.
Moving From TCFD to Quantitative Climate Disclosure
The UK sustainability reporting standards mark a structural shift in how UK-listed companies report climate risk. UK SRS S2 requires amounts and percentages, and scenario-based resilience assessments backed by disclosed methodologies and data sources.
Companies that have been reporting under TCFD have a head start on governance and strategy disclosures. The areas requiring the most work are quantitative physical risk metrics under Paragraph 29(c), formal scenario analysis with documented inputs and scope, and the removal of first-year timing relief that compresses the implementation window. Starting data sourcing and gap assessment now provides the best chance of a smooth transition when the new rules apply to periods starting in January 2027.
