UK Sustainability Reporting Standards — S1 and S2

Leeds Reforms and UK Competitiveness

UK SRS is the UK's adoption of the ISSB global baseline for sustainability reporting.

The UK SRS S1 and S2 standards were published by DBT on 25 February 2026.

To understand how UK SRS sits within the wider sustainability reporting landscape — including SECR, ESOS, CSRD comparability, and voluntary frameworks — see our broader reference.

FCA CP26/5 proposals are framed within the Government's Leeds Reforms package — positioning UK SRS adoption as supporting UK international competitiveness and reducing duplicative cross-border reporting burdens for UK-listed companies 1. The reforms aim to strengthen "the UK's position as a global financial centre, by boosting comparability across markets and reducing duplicative rules" 1.

UK SDR Broader Package Context

UK SRS sits within the UK Government's broader Sustainability Disclosure Requirements (SDR) framework 2. SDR brings together: UK SRS (corporate sustainability disclosure standards for listed companies and voluntary adopters); FCA SDR product labels for investment funds (anti-greenwashing regime effective from 2024) 3;transition plan requirements (subject to separate Government consultation in 2025-2026) 4;ISSA (UK) 5000 sustainability assurance standard (effective 15 December 2026) 5.

The SDR framework provides "investors and consumers ... the sustainability information they need ... [protecting] against consumer harms such as greenwashing" per Government policy statement 2.

FCA Enforcement Approach

FCA enforcement approach to UK SRS compliance will be set out in a future Primary Market Bulletin — the FCA's standard mechanism for communicating supervisory expectations to listed companies 6. The Bulletin will detail monitoring approach, common areas of challenge, and enforcement priorities.

Transitional Provisions for Pre-2027 Periods

Listed companies with accounting periods beginning before 1 January 2027 face a transitional choice under FCA CP26/5: (i) continue applying TCFD-aligned rules until their next accounting period; OR (ii) voluntarily comply with proposedUK SRS rules early for the current period 7. Important constraint: voluntary early adopters in this position cannot use the UK SRS transitional reliefs (Scope 3 deferral, etc.) because the reliefs only apply from the FCA's 'initial application' date of 1 January 2027 7.

IFRS Foundation Global Adoption

37 jurisdictions have decided to use or are taking steps to introduce ISSB Standards as of September 2025, per the IFRS Foundation's authoritative adoption tracker 8 — covering approximately 60% of global market capitalisation, 60% of global GDP, and over 40% of global greenhouse gas emissions 8.

IOSCO Endorsement Foundation

The UK's decision to adopt IFRS S1 and S2 baseline reflects the IOSCO endorsement of July 2023, which concluded the ISSB standards are appropriate to serve as a global framework for capital markets 9. IOSCO's 130 member jurisdictions — including the UK's FCA — were called on to consider mandatory application or voluntary use within their regulatory frameworks 9.

Cross-Jurisdictional Comparison

The UK SRS approach positions the UK within the ISSB-aligned majority — 37 jurisdictions per IFRS Foundation's September 2025 tracker 8. Most jurisdictions targeting ISSB adoption are pursuing 'fully adopt' approaches with minor jurisdiction-specific amendments (UK's six amendments are characteristic). The EU CSRD/ESRSregime is the principal exception, layering double materiality on top of the ISSB-compatible baseline 10.

PRI Critique of UK-Specific Carve-outs

The Principles for Responsible Investment (PRI) — the world's leading proponent of responsible investment with 5,000+ signatories representing $128tn AUM — has expressed concerns about UK-specific provisions making Scope 3 emissions andS1 non-climate disclosures voluntary/comply-or-explain 11.

PRI's critique centres on investor access to material information: "These carve-outs risk limiting investors' access to material information.

For many sectors, Scope 3 emissions represent the majority of total emissions" 11.

The approach "departs from most of the nearly 40 jurisdictions that have already adopted ISSB standards, or are in the process of doing so" 11. PRI recommends a phased mandatory approach over comply-or-explain provisions.

IIGCC Formal Response

The Institutional Investors Group on Climate Change (IIGCC) — European investor body representing 400+ members managing €60tn AUM — submitted a formal response to FCA CP26/5 on 25 March 2026 12. IIGCC's broader engagement context includes the Net Zero Engagement Initiative covering 160 focus companies with 100+ investor signatories — 60% of which have taken steps toward 1.5°C-aligned transition plans per the Initiative's year 2 data 13.

Transition Plan Framework Integration

The UK Transition Plan Taskforce (TPT) framework has been integrated under the IFRS Foundation since 2024, becoming part of the international transition plan disclosure infrastructure 14. FCA CP26/5 proposes Handbook Guidance referencing the IFRS Educational Material on transition plans — which incorporates TPT framework elements — as suggested reference for listed companies 14. The FCA does NOT propose to mandate transition plans (matter for Government); but requires disclosure of whether and where a transition plan has been published.

Asset Manager Portfolio Implications

Asset managers face multiple UK SRS implications beyond their own direct reporting 15. Listed asset managers in CP26/5 scope must prepare for mandatory UK SRS reporting from 1 January 2027. All asset managers with UK in-scope listed portfolio holdings benefit from improved standardised data flowing from those companies, useful for investment analysis and engagement 15.

Private capital managers (PE, VC, infrastructure) face potential MCR Strand 2 implications — required scoping of portfolio companies for UK SRS reporting plus data/reporting work flowing up to fund-level disclosure 15. FCA has signalled it will consider updating asset manager disclosure requirements in line with UK SRS standards and TPT Disclosure Framework 15.