UK SRS Consultation: How to Influence the Scope and Timeline of Mandatory Sustainability Reporting
Key Takeaways
- The UK Government has opened formal consultation on making UK Sustainability Reporting Standards (UK SRS) mandatory — the most significant change to UK corporate reporting since TCFD
- Approximately 515 UK-listed companies are expected to be in the first mandatory scope, for accounting periods beginning on or after 1 January 2027
- Companies Act amendments are required to give UK SRS legal force — the consultation seeks views on scope, phasing, and transitional provisions
- Scope 3 emissions disclosure will operate on a comply-or-explain basis with one year of transitional relief for first-time reporters
- Companies that respond to the consultation can shape the final rules — scope thresholds, transitional periods, and proportionality measures are all under consideration
The Consultation Context
In June 2025, the Department for Business and Trade (DBT) published a formal consultation on the scope and implementation of UK Sustainability Reporting Standards. This follows the publication of UK SRS S1 and S2 in February 2025 and the Technical Advisory Committee’s endorsement recommendation in December 2024.
The consultation addresses three core questions: which companies should be legally required to report against UK SRS, when the requirements should take effect, and how the transition from current reporting requirements (TCFD, SECR) should be managed.
Who Will Be in Scope
The Government’s preferred option, set out in the consultation, is to require UK SRS reporting for companies listed on UK-regulated markets. This captures approximately 515 companies listed on the London Stock Exchange Main Market and other UK-regulated markets.
The consultation also seeks views on potential future extension to:
- Large private companies (meeting two of three criteria: 250+ employees, £36m+ turnover, £18m+ total assets)
- AIM-listed companies (currently on a multilateral trading facility, not a regulated market)
- Large LLPs (matching the private company thresholds)
The phasing of any extension beyond listed companies is not yet determined. The consultation document suggests a minimum two-year gap between the listed company requirement and any extension to large private companies.
What UK SRS Requires
UK SRS S1 (General Requirements) establishes the framework for disclosing sustainability-related financial information. It requires companies to report on sustainability-related risks and opportunities that could reasonably be expected to affect the company’s prospects. Key requirements include governance structures, strategy, risk management processes, and metrics and targets.
UK SRS S2 (Climate-related Disclosures) is the climate-specific standard. It requires:
- Scope 1 and 2 greenhouse gas emissions (mandatory)
- Scope 3 emissions (comply-or-explain, with one year of transitional relief)
- Climate-related risks and opportunities, including physical and transition risks
- Climate scenario analysis
- Transition plans aligned with the TPT Disclosure Framework
- Board and management governance of climate-related matters
UK SRS is closely aligned with ISSB IFRS S1 and S2 but includes UK-specific modifications, including explicit reference to the TPT framework for transition plan disclosure.
Scope 3: The Comply-or-Explain Approach
Scope 3 emissions — value chain emissions covering categories such as purchased goods, business travel, employee commuting, and use of sold products — represent the most complex and contentious element of UK SRS S2.
The consultation proposes a comply-or-explain approach: companies must either disclose Scope 3 emissions or explain why they have not done so. This is a less prescriptive approach than the EU’s CSRD, which requires Scope 3 disclosure for all material categories.
Additionally, first-time reporters will receive one year of transitional relief, allowing them to develop Scope 3 data collection processes before full disclosure is required. This means that for accounting periods beginning 1 January 2027, companies can defer Scope 3 to their second reporting year (2028 data, reported in 2029).
The practical implication is that companies should begin Scope 3 data collection now, even if full disclosure is not required until 2028 or 2029. Supplier engagement, spend-based estimation methodologies, and industry-average emission factors all require lead time to implement.
Companies Act Amendments
Making UK SRS mandatory requires legislative change. The Government proposes amendments to the Companies Act 2006 to:
- Create a legal requirement for in-scope companies to prepare sustainability reports in accordance with UK SRS
- Define the scope of companies caught by the requirement
- Establish enforcement mechanisms, including penalties for non-compliance
- Enable the FCA to make listing rules requiring UK SRS reporting (the FCA published PS26/19 in September 2026, confirming this)
The legislative timetable is ambitious. For UK SRS to apply to accounting periods beginning 1 January 2027, the Companies Act amendments must be enacted during 2026. The consultation responses will inform the drafting of the legislation.
How This Relates to Existing Requirements
UK SRS will not operate in a vacuum. UK-listed companies currently face:
- TCFD-aligned listing rules: Mandatory for premium and standard listed companies since 2022. UK SRS will supersede these requirements
- SECR: Mandatory energy and carbon reporting for qualifying large companies. The Government has proposed reviewing SECR in light of UK SRS to avoid duplication
- Section 172 strategic report: Existing Companies Act requirements to describe how directors have regard to stakeholder interests
- CSRD (for EU-scope companies): UK companies with EU operations may face parallel reporting obligations under CSRD/ESRS and UK SRS
The consultation signals the Government’s intent to consolidate and streamline these requirements where possible, reducing the reporting burden while maintaining disclosure quality.
What You Should Do Now
- Respond to the consultation — this is your opportunity to influence scope thresholds, transitional periods, and proportionality measures
- Conduct a gap analysis against UK SRS S1 and S2 requirements. Identify where your current TCFD/SECR reporting falls short
- Begin Scope 3 data collection even if you intend to use the comply-or-explain provision initially
- Engage your board on governance requirements — UK SRS requires board-level oversight of sustainability disclosures
- Plan for assurance — while the consultation has not confirmed mandatory assurance from day one, the direction of travel is clear
- Align with TPT — UK SRS explicitly references the TPT framework for transition plan disclosure. Companies should begin developing TPT-aligned transition plans
Need a UK SRS Gap Analysis?
Our advisory team conducts structured gap assessments against UK SRS S1 and S2, helping you identify disclosure gaps, data system requirements, and governance enhancements before the mandatory deadline.