UK SRS Glossary: Key Terms and Definitions

This glossary provides clear definitions of key terms related to UK Sustainability Reporting Standards (UK SRS). Understanding these terms is essential for navigating UK SRS compliance requirements and sustainability reporting obligations.

UK SRS

The UK Sustainability Reporting Standards — the UK's domestically endorsed equivalents of the IFRS Sustainability Disclosure Standards, published by the Financial Reporting Council in February 2026. UK SRS adopts IFRS S1 and S2 with UK-specific modifications including phased implementation and Scope 3 carve-outs.

UK SRS S1

The first of the two UK Sustainability Reporting Standards, covering general requirements for sustainability-related financial disclosures. S1 establishes the four-pillar framework (governance, strategy, risk management, metrics and targets) across all material sustainability topics including environmental, social, and governance factors.

UK SRS S2

The second UK Sustainability Reporting Standard, covering climate-related disclosures. S2 requires disclosure of climate-related risks and opportunities, greenhouse gas emissions (Scope 1, 2, and 3), climate scenario analysis, and transition plans. Becomes mandatory from January 2027 for large UK-listed companies.

FRC

Financial Reporting Council — the UK's independent regulator responsible for promoting high quality corporate governance and reporting. The FRC published the UK SRS standards and provides ongoing implementation guidance, assurance standards, and oversight of reporting quality.

FCA

Financial Conduct Authority — the UK financial services regulator responsible for implementing mandatory UK SRS requirements through listing rules and regulatory guidance. The FCA determines which entities must comply and establishes enforcement procedures.

TCFD

Task Force on Climate-related Financial Disclosures — the framework established by the Financial Stability Board that UK SRS S2 builds upon and will eventually replace. TCFD recommendations provided the foundation for global climate disclosure frameworks.

ISSB

International Sustainability Standards Board — the global standard-setter under the IFRS Foundation that developed IFRS S1 and S2, which form the basis for UK SRS. The ISSB aims to develop a comprehensive global baseline for sustainability disclosures.

Scope 1 Emissions

Direct greenhouse gas emissions from sources owned or controlled by the company. Examples include emissions from company vehicles, on-site energy generation, manufacturing processes, and fugitive emissions. These are typically the easiest emissions to measure and control.

Scope 2 Emissions

Indirect greenhouse gas emissions from the generation of purchased electricity, steam, heating and cooling consumed by the company. While not directly controlled by the company, these emissions result from the company's energy consumption decisions and can be influenced through renewable energy procurement.

Scope 3 Emissions

All other indirect greenhouse gas emissions that occur in the company's value chain. This includes upstream emissions (supplier activities, business travel, employee commuting) and downstream emissions (product use, disposal, distribution). Often the largest source of emissions but most challenging to measure. UK SRS S2 includes a temporary carve-out for Scope 3 in the first year.

Materiality Assessment

The process of identifying and evaluating sustainability-related risks and opportunities that could reasonably influence investment or business decisions. Under UK SRS, materiality focuses on financially material topics rather than broader stakeholder materiality concepts used in some other frameworks.

Sustainability Disclosure

Information about sustainability-related risks and opportunities that could affect an entity's cash flows, access to finance, or cost of capital over the short, medium, or long term. UK SRS requires these disclosures to be integrated with financial reporting rather than published as standalone reports.

ESG Reporting

Environmental, Social, and Governance reporting — the practice of measuring and disclosing a company's performance across these three key sustainability dimensions. UK SRS provides a structured framework for ESG reporting focused on financially material information.

Double Materiality

A concept requiring companies to consider both how sustainability matters affect the company (financial materiality) and how the company affects the environment and society (impact materiality). While prominent in EU frameworks, UK SRS focuses primarily on financial materiality.

Physical Risk

Climate-related risks resulting from physical effects of climate change, including acute risks (extreme weather events) and chronic risks (longer-term shifts in climate patterns). UK SRS S2 requires assessment and disclosure of material physical risks.

Transition Risk

Climate-related risks arising from the transition to a lower-carbon economy, including policy and legal risks, technology risks, market risks, and reputation risks. Companies must assess how the low-carbon transition could affect their business model and strategy.

Scenario Analysis

A process for exploring and assessing potential future outcomes by considering alternative possible scenarios, particularly climate-related scenarios. UK SRS S2 requires companies to conduct and disclose climate scenario analysis, unlike the recommended approach under previous TCFD guidance.