UK · mandatory or not
Are sustainability reports mandatory UK
Some UK organisations have statutory sustainability reporting duties, with separate scope tests and reporting outputs rather than one universal report.
SECR, ESOS and the Companies Act climate-disclosure duty already apply to organisations in their separate scopes, while the FCA’s final UK SRS rules apply on a comply-or-explain basis for in-scope listed companies from accounting periods beginning on or after 1 January 2027.
The government’s open consultation proposes removing some narrative disclosures, but leaves the climate ones alone.
Short answer
Yes for some, and never under one law
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Disclosure
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Disclosure · 2
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Boundary
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Listed categories
Read the detailed guidance and evidence
There is no UK law that requires a “sustainability report”.
Instead, particular disclosures are compulsory for particular organisations, and each regime draws its own line.
Energy and carbon reporting under SECR reaches the widest group; the Companies Act climate disclosures reach the largest companies; ESOS reaches large undertakings but produces an assessment, not a public report.
The UK Sustainability Reporting Standards are voluntary for any entity, and the FCA’s rules put listed companies on a comply-or-explain basis against them from 2027.
What UK SRS is and who the FCA rules reach are covered on their own pages; this page answers only whether you must report at all.
The full ledger of UK ESG obligations, social and governance included, is on ESG reporting requirements in the UK.
Law today
What is mandatory now
Three regulations require climate or energy reporting on 30 September 2026, and the listing rules add a comply-or-explain layer for listed companies.
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SECR
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Climate-related financial disclosures
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ESOS
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FCA listing rules
Read the detailed guidance and evidence
| Regime | What it requires | Who | Applies |
|---|---|---|---|
| SECR | Energy use, Scope 1 and 2 emissions, an intensity ratio | Quoted companies at any size; large unquoted companies and LLPs | Since 1 April 2019 |
| Climate-related financial disclosures | Eight disclosures in the strategic report, s.414CB(2A) | More than 500 employees plus traded, banking, insurance, AIM, or over £500m turnover | Financial years from 6 April 2022 |
| ESOS | An energy assessment and notification every four years | At least 250 employees, or over £44m turnover and over £38m balance sheet | Phase 4 notification due 5 December 2027 |
| FCA listing rules | TCFD-aligned disclosures, comply or explain; replaced by UK SRS from 2027 | Listed companies in the covered categories | UK SRS rules from 1 January 2027 |
SECR comes from SI 2018/1155: a quoted company reports global energy and emissions at any size, and a large unquoted company reports UK figures unless it is exempt.
The exemption is written in Schedule 7 paragraph 20B as meeting two or more of turnover not more than £36 million, balance sheet not more than £18 million, and not more than 250 employees.
The government’s SECR guidance sets out the method; the tests and reliefs are on SECR thresholds, SECR exemptions and is SECR mandatory.
The climate-related financial disclosures were inserted into the Companies Act by SI 2022/31 and follow the four-part structure explained on the four pillars of TCFD; the scope detail is on UK TCFD requirements.
ESOS, under SI 2014/1643, requires an assessment and notification; Phase 4 qualification is judged on 31 December 2026 and notification is due by 5 December 2027 (ESOS, is ESOS mandatory).
Listed companies have made TCFD-aligned climate disclosures on a comply-or-explain basis under the listing rules; PS26/19 paragraph 1.10 says the new UK SRS rules replace them.
Not law
What is voluntary, or comply or explain
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UK SRS S1 and S2
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IFRS S1 and S2
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GRI Standards
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ESRS
| Standard or framework | Status for a UK company |
|---|---|
| UK SRS S1 and S2 | Voluntary; comply or explain for listed companies in scope from 2027 |
| IFRS S1 and S2 | Not adopted as such; endorsed in the UK as UK SRS |
| GRI Standards | Voluntary; no UK instrument requires them |
| ESRS | EU law; reaches a UK group only through the EU |
Read the detailed guidance and evidence
The sustainability reporting standards themselves bind no UK company by law.
UK SRS S1 and S2 were published on 25 February 2026 and, in the government’s words, are “available for voluntary use, by any entity that chooses to do so”.
The FCA’s final rules require listed companies in UKLR 6, 14, 15, 16 and 22 to report against them or explain, from accounting periods beginning on or after 1 January 2027.
The consultation had proposed making UK SRS S2 mandatory; the final rules put both standards on comply or explain.
What each standard asks for is on UK SRS S1 and UK SRS S2, and the dates on the UK SRS timeline.
A company choosing to use them before it has to is covered on voluntary UK SRS reporting.
Proposed
Is the UK removing mandatory non-financial disclosures? Some, not the climate ones
Two government documents propose cutting narrative reporting; neither has changed the law yet.
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WMS HCWS973, 21 Oct 2025
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Consultation ¶7
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Consultation ¶128
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Consultation ¶147
Read the detailed guidance and evidence
| Document | What it proposes | State on 30 September 2026 |
|---|---|---|
| WMS HCWS973, 21 Oct 2025 | Exempt most medium-sized private companies (up to 44,000) and wholly owned subsidiaries (around 7,000) from the strategic report; remove the directors’ report (about 440,000 companies) | Not legislated; Annex A says drafting is at an early stage |
| Consultation ¶7 | Abolish the directors’ report; relocate some of its contents | Proposal; statutory instruments "in due course" |
| Consultation ¶128 | Replace most strategic report requirements with baseline narrative disclosures | Proposal, open to 30 November 2026 |
| Consultation ¶147 | Climate-related financial disclosures | Not proposed for change; review due by spring 2027 |
| Consultation ¶149 | SECR | Moves location with the directors’ report; the duty is untouched |
So the answer to whether the UK is removing mandatory non-financial ESG disclosures is: it proposes to remove some prescribed narrative topics, and none has gone.
Paragraph 128 of the consultation proposes baseline disclosures covering business model, performance, resources and relationships, strategy and principal risk exposures.
Paragraph 147 says the consultation “does not include proposals regarding the future of the CFD requirements”.
The legislation for the October 2025 changes is still in draft; Annex A describes the amendments as “still in an early stage of drafting”.
The same government statement puts the saving from the whole package, including the consultation, at around £230 million a year.
The private-company angle, including why no UK SRS threshold appears anywhere, is on private companies and UK SRS.
Your company
Who must report, by company type
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Company listed in UKLR 6, 14, 15, 16 or 22
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Large unquoted company or LLP
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AIM company
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Small or medium private company
The UK regime check · your figures
- AppliesSECRIn, as a large unquoted company: you meet at most one of the three “not more than” limits, so the exemption does not apply.SI 2008/410 Sch 7 Part 7A, ¶20B
- AppliesESOS Phase 4A large undertaking: at least 250 employees, or turnover over £44m and balance sheet over £38m. Qualification is judged on 31 December 2026; notification is due by 5 December 2027.SI 2014/1643 Sch 1 ¶1(a), ¶1A; reg 4
- Does not applyClimate-related financial disclosureNeeds more than 500 employees and either a traded, banking, insurance or AIM company, or turnover above £500m.Companies Act 2006 ss.414CA–414CB
- Does not applyFCA listing rules (UK SRS)No listing, no FCA duty. UK SRS stays voluntary for you.FCA PS26/19 ¶3.6; GOV.UK UK SRS guidance
Indicative, not advice.
Group aggregation, LLPs, overseas parents and how size carries across financial years are on each regime’s own page.
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Read the detailed guidance and evidence
Two facts decide most of it: whether the company is listed, and how big it is against each regime’s own test.
| Company type | Mandatory now | Changing |
|---|---|---|
| Company listed in UKLR 6, 14, 15, 16 or 22 | SECR as a quoted company, if UK-incorporated with equity on the Official List; s.414CB if over its test; listing-rule climate disclosures | UK SRS, comply or explain, from periods beginning 1 January 2027 |
| Large unquoted company or LLP | SECR unless exempt on two of three; ESOS if a large undertaking; s.414CB if over its test | Nothing proposed for UK SRS |
| AIM company | SECR as an unquoted company; s.414CB if more than 500 employees | Outside the FCA’s UK SRS rules |
| Small or medium private company | Usually none | Possible strategic report exemptions, if legislated |
| UK group with a large EU footprint | The UK regimes as above | CSRD through EU undertakings or Article 40a |
An AIM company is unquoted under section 385, so it reports SECR only if it is large, and reports UK figures.
Set your figures in the check; each verdict names the provision it reads, and group aggregation is left to the regime pages.
A fuller check against every UK SRS limb is on UK SRS compliance.
Transition plans
Are transition plans mandatory? No, but listed companies must say
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Key point 01
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Listed categories
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Oversight
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Legal route
Read the detailed guidance and evidence
No UK entity is under a legal duty to have, implement or publish a climate transition plan.
The FCA’s made rule asks a listed company to state whether it has published a transition plan and where, or why not; the FCA says it is “not requiring listed companies to produce transition plans”.
The government consulted on transition plan requirements from 25 June to 17 September 2025.
The detail is on transition plans under UK SRS and UK transition plan regulation.
The EU
Does the CSRD make reporting mandatory for UK companies?
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Boundary
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Key point 02
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Boundary · 2
Read the detailed guidance and evidence
The CSRD is EU law, so it binds EU undertakings, including the EU subsidiaries of a UK group.
After Directive (EU) 2026/470, an EU undertaking is in scope above €450 million net turnover and 1,000 employees, both.
A UK parent is reached directly only through Article 40a: EU net turnover above €450 million in each of the last two consecutive financial years, and an EU subsidiary or branch above €200 million.
The UK route in is explained on CSRD for UK companies.
Enforcement
What happens if a company does not report
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SECR, s.414CB
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Late accounts
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ESOS
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Listing rules
Who enforces what
| Regime | Enforcer and route |
|---|---|
| SECR, s.414CB | FRC court application (s.456); directors’ offence (s.419) |
| Late accounts | Companies House civil penalty (s.453) |
| ESOS | Environment Agency, fixed civil penalties |
| Listing rules | FCA penalty under FSMA s.91 |
Read the detailed guidance and evidence
None of these regimes has a sustainability-specific fine; each borrows its enforcement from the law it sits in.
A directors’ or strategic report that omits SECR or climate disclosures is a defective report: directors who approve it knowing it does not comply can commit an offence under section 419.
The FRC, authorised by SI 2021/465, can apply to court under section 456; its operating procedures say every case so far has been resolved without a court order.
ESOS penalties are set in Part 8 of its regulations, from £5,000 for failing to notify to £50,000 for failing to undertake an assessment, plus daily amounts.
For a listed company, the FCA may impose a penalty for breaching listing rules under section 91 of the Financial Services and Markets Act 2000; an explanation that meets the rule is not a breach.
Frequently asked
Questions people ask
Is sustainability reporting mandatory in the UK?
For some organisations, under specific regulations — never under a single sustainability reporting law.
SECR requires quoted companies and large unquoted companies and LLPs to report energy use and emissions.
The Companies Act 2006 requires climate-related financial disclosures from companies with more than 500 employees that are traded, banking, insurance or AIM companies or have turnover above £500 million.
ESOS requires large undertakings to carry out energy assessments.
The UK Sustainability Reporting Standards are voluntary for most entities; listed companies in scope report against them on a comply-or-explain basis from 2027.
Is the UK removing mandatory non-financial ESG disclosures from corporate reports?
It is proposing to, in part, and nothing has been removed yet.
The Modernising corporate reporting consultation (7 September to 30 November 2026) proposes removing the directors' report and replacing most strategic report requirements with baseline narrative disclosures on business model, performance, resources and relationships, strategy and principal risks.
It does not propose changes to the climate-related financial disclosures, which are under a separate review due by spring 2027, and SECR disclosures would move location rather than disappear.
The earlier strategic report exemptions announced on 21 October 2025 still await legislation.
Is carbon reporting mandatory for UK companies?
For quoted companies at any size, and for large unquoted companies and LLPs.
SECR, in force since 1 April 2019, puts energy use and greenhouse gas emissions in the annual report.
An unquoted company is exempt if it meets two or more of: turnover not more than £36 million, balance sheet not more than £18 million, not more than 250 employees.
An AIM company counts as unquoted for this purpose.
Are UK SRS reports mandatory?
No. UK SRS S1 and S2 are voluntary standards.
Under the FCA's final rules (PS26/19, 30 September 2026), companies listed in UKLR 6, 14, 15, 16 and 22 must report against them or explain why not, for accounting periods beginning on or after 1 January 2027. That is comply or explain across both standards, not a mandate.
Is sustainability reporting mandatory for small companies in the UK?
Generally no.
SECR, the Companies Act climate disclosures and ESOS all target large or listed organisations.
A small or medium-sized private company usually has no statutory sustainability reporting duty, although customers, lenders and public-sector buyers may ask for data.
Are climate transition plans mandatory in the UK?
No UK entity is under a legal duty to have one.
Listed companies in scope of the FCA rules must say whether they have published a climate-related transition plan and where, or why they have not; the FCA says it is not requiring them to produce one.
The government's consultation on transition plan requirements closed on 17 September 2025.
Does the EU CSRD make sustainability reporting mandatory for UK companies?
Not directly; it is EU law.
A UK group is reached through its EU undertakings, or under Article 40a where it has EU net turnover above €450 million in each of the last two consecutive financial years and an EU subsidiary or branch above €200 million.
What happens if a company does not report?
It depends on the regime.
For SECR and the Companies Act climate disclosures, directors who approve a non-compliant report can commit an offence under section 419, and the FRC can apply to court for revision under section 456, although it says every case so far has been resolved voluntarily.
ESOS carries fixed civil penalties enforced by the Environment Agency.
For listing rule breaches, the FCA may impose a penalty under section 91 of the Financial Services and Markets Act 2000.
Prepare the evidence
Are sustainability reports mandatory UK: from a requirement to a reporting pack
Use this preparation sequence alongside the detailed requirements on this page.
An editorial workflow, not a statutory schedule.
- Stage 0101
Applicability
Record the listing category or voluntary reporting decision.
- Stage 0202
Period and boundary
Set the reporting entity and period before collecting disclosures.
- Stage 0303
Materiality
Document the financial materiality judgements behind the disclosures.
- Stage 0404
Governance and strategy
Connect oversight, strategy and risk management to the reporting evidence.
- Stage 0505
Metrics and reliefs
Record methods, estimates, targets and any relief actually used.
- Stage 0606
Connected publication
Reconcile the disclosure pack with the annual report and approval record.
Read the applicable instrument: SI 2018/1155 — Companies (Directors’ Report) and LLPs (Energy and Carbon Report) Regulations 2018
A practical brief
An evidence pack, with a clear review trail
Ask for a pack that lets the next reviewer retrace the scope decision, follow the evidence and understand the limitations.
This describes a useful handover; it does not certify compliance or establish that a vendor or adviser delivers it.
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Applicability record
Write down the entity, reporting route and relevant period, including why the route applies.
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Evidence register
Attach each reported figure or statement to its source, method, version and limitations.
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Review trail
Name the preparer, reviewer, open questions and decisions taken before publication.
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Usable handover
Retain the working files and unresolved actions so the next reporting cycle can reuse the evidence.
View the preparation diagram
- Prepare01
Create the traceable pack
Keep the input records, calculation files and narrative together.
- Challenge02
Resolve questions before publication
Record the assumptions challenged and any limitations still unresolved.
- Retain03
Make the next cycle reproducible
Keep the approved version and the actions carried forward.
Continue your research
Related guides, one question at a time
Sources
Primary sources
Every figure, date and status on this page traces to the instrument’s owner.
Secondary commentary is never the source for a number.
- legislation.gov.ukSI 2018/1155 — Companies (Directors’ Report) and LLPs (Energy and Carbon Report) Regulations 2018
SECR, in force 1 April 2019.
- legislation.gov.ukSI 2008/410 Schedule 7 Part 7A ¶20B
The unquoted-company exemption test.
- Department for Energy Security and Net ZeroEnvironmental reporting guidelines, including Streamlined Energy and Carbon Reporting requirements
The government’s SECR guidance, last updated 29 March 2019.
- legislation.gov.ukSI 2022/31 — Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022
Financial years beginning on or after 6 April 2022.
- legislation.gov.ukCompanies Act 2006, sections 414CA and 414CB
The duty (A1), the eight disclosures (2A); scope at s.414CA.
- legislation.gov.ukCompanies Act 2006
Sections 385 (quoted company), 419, 453 and 456.
- legislation.gov.ukSI 2014/1643 — Energy Savings Opportunity Scheme Regulations 2014
Part 8 penalties.
- legislation.gov.ukSI 2014/1643 Schedule 1 (large undertaking)
- Financial Conduct AuthorityPS26/19: Aligning listed issuers' sustainability disclosures with international standards
Comply or explain across UK SRS, accounting periods from 1 January 2027.
- Financial Conduct AuthorityPS26/19 (PDF), ¶1.10 and Appendix 1
The new rules replace the TCFD-aligned disclosures; transition plan and assurance statements.
- Financial Conduct AuthorityCP26/5 — the consultation PS26/19 finalises
- legislation.gov.ukFinancial Services and Markets Act 2000, section 91
Penalties for breach of listing rules.
- Department for Business and TradeUK Sustainability Reporting Standards: UK SRS S1 and UK SRS S2
- Department for Business and TradeUK Sustainability Reporting Standards — guidance
"Available for voluntary use, by any entity that chooses to do so."
- Department for Business, Innovation, Science and TradeModernising corporate reporting — consultation
7 September to 30 November 2026.
- Department for Business, Innovation, Science and TradeModernising corporate reporting — consultation document (PDF), ¶¶7, 128, 147–150
- Department for Business, Innovation, Science and TradeAnnex A: October 2025 legislative changes (PDF)
- UK ParliamentWritten Ministerial Statement HCWS973, 21 October 2025
44,000 medium-sized companies and 7,000 subsidiaries; 440,000 affected by the directors’ report removal.
- Financial Reporting CouncilCorporate Reporting Review — operating procedures
All cases resolved voluntarily, without a court order.
- legislation.gov.ukSI 2021/465 — the FRC authorised for section 456
- EUR-LexDirective (EU) 2026/470 (Omnibus I)
- EUR-LexDirective 2013/34/EU, consolidated 18 March 2026, Article 40a
€450m EU turnover for each of the last two consecutive years; €200m subsidiary or branch.
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