UK SRS for private companies

Current position — private companies not in scope

UK SRS S1 and S22 were published by the Department for Business and Trade on 25 February 2026. The FCA's CP26/5 proposals3 establish mandatory UK SRS S2 application for listed companies in UKLR categories 6, 14, 15, 16, and 22 from accounting periods beginning 1 January 2027.

Private companies are NOT in mandatory UK SRS scope under either UK SRS itself2 or CP26/53. The standards permit voluntary application by any entity, with Companies Act 2006 section 414CB(2A) designation48 benefits available to voluntary adopters — but no current legal requirement applies to private entities solely on grounds of being large.

Existing private company obligations relevant to climate reporting continue7:

• SECR (Streamlined Energy and Carbon Reporting) applies to large companies including large private companies — Companies (Directors' Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018
• Strategic Report requirements under section 414A of the Companies Act 2006 apply to non-small companies
• Section 414CB climate-related financial disclosure requirements apply to certain large companies (originally framed to extend TCFD-aligned disclosure beyond listed entities)

The MCR programme

The Department for Business and Trade confirmed the Modernising Corporate Reporting (MCR) programme1 via Written Ministerial Statement on 21 October 2025. The programme is a coordinated effort to modernise the UK corporate reporting framework, organised in two strands.

Strand 1 — Simplification

Strand 1 reduces reporting burden for smaller entities1. The headline measure: approximately 51,000 companies expected to be exempted from the Strategic Report requirement under section 414A of the Companies Act 20066. Estimated annual administrative savings: approximately £230 million1.

The Strand 1 simplification primarily affects smaller and medium-sized entities — the same entities that are unlikely to be in scope of MCR Strand 2 extension to UK SRS. The two strands are coordinated: Strand 1 reduces burden where the policy rationale doesn't support detailed reporting; Strand 2 extends UK SRS where the policy rationale does support it.

Strand 2 — Extension

Strand 2 is expected to extend UK SRS2 application to economically significant private companies and LLPs through amendments to the Companies Act 2006456. The Written Ministerial Statement1 confirms the direction but defers specific scope and timing to a consultation expected during 2026.

What is confirmed about the direction

Three elements are confirmed by the Written Ministerial Statement1:

• Direction — extension of UK SRS application to large private companies and LLPs is the stated Government intent, not merely under consideration
• Vehicle — Companies Act 2006 amendments are the legislative mechanism, consistent with how listed company UK SRS application is integrated under section 414CB(2A)
• Process — a separate consultation will set scope, thresholds, timing, and transition arrangements, expected to publish during 2026

The Government has also committed to the broader MCR programme financial impact1 — including the £230 million estimated savings from Strand 1 and the policy logic that Strand 2 should not undermine the simplification achieved in Strand 1.

What awaits the 2026 consultation

Multiple practically significant elements remain unconfirmed pending the MCR consultation1:

• Specific size thresholds — turnover, employee count, balance sheet, or combinations. The EU CSRD uses 250+ employees, €50m+ turnover, OR €25m+ balance sheet; UK thresholds may differ
• Entity scope — whether all economically significant private companies and LLPs are in scope, or whether sub-groupings (PE-backed, family-owned, subsidiary-only) are treated differently
• Timing — consultation publication date, response period, final policy decision, legislation passage, and effective date
• Transition arrangements — whether the listed regime first-year reliefs (no comparatives, alternative GHG method, Scope 3 deferral) will apply to private entrants
• Assurance arrangements — whether voluntary or mandatory assurance, and whether ISSA (UK) 5000 applies as the methodology
• Interaction with SECR — whether SECR will be subsumed, retained, or modified for entities in scope of UK SRS
• Connectivity for non-listed entities — how UK SRS S1 connectivity requirements apply where the entity does not produce a full Annual Report in the listed format

The consultation may also address LLPs explicitly — the Limited Liability Partnerships (Energy and Carbon Report) Regulations 20187 already apply SECR-equivalent obligations to LLPs, so the framework for extending UK SRS to LLPs has a precedent.

Five private company positions

Private companies face very different practical positions under UK SRS depending on their relationship to listed entities, ownership structure, and size. The table below summarises five typical positions, their current status, the likely MCR Strand 2 effect, and recommended action during the 2026 consultation window. Each position is examined in detail in the sections that follow.

Subsidiary of UK-listed parent

Where a private company is a subsidiary of a UK-listed parent in scope of FCA CP26/53, the subsidiary itself is not separately in scope of UK SRS2. The parent reports at group level on a consolidated basis, with the subsidiary's operations and emissions included in the group disclosure.

Practical implications for the subsidiary:

• The parent reporting team will require subsidiary-level data on Scope 1 and 2 emissions, Scope 3 contribution, climate risks affecting subsidiary operations, and the subsidiary's relevance to material business model disclosures under paragraph 13
• For financial institution subsidiaries, paragraph B59-B66 financed emissions disclosure may require detailed subsidiary portfolio data
• Subsidiary governance arrangements (board oversight, management responsibilities) should mirror group-level UK SRS governance where the subsidiary is material to group reporting
• Voluntary subsidiary-level UK SRS application can support group reporting credibility and prepare for any future direct application under MCR Strand 2

Subsidiary of EU CSRD-reporting parent

Where a UK private company is a subsidiary of an EU parent in scope of EU CSRD9, the UK subsidiary contributes data to the parent's CSRD reporting (which uses double materiality, not UK SRS enterprise value materiality). The UK subsidiary itself is not currently in UK SRS scope2.

Practical position:

• Data flow to parent reporting team for CSRD purposes — typically broader than UK SRS data requirements (impact materiality requires non-financial topics not covered by UK SRS)
• UK SRS voluntary application can provide UK-specific governance and disclosure where the parent's CSRD report doesn't adequately address UK stakeholder needs
• Section 414CB(2A) designation applies even to voluntary UK SRS application — providing a clean Companies Act compliance pathway
• If MCR Strand 2 brings the UK subsidiary into mandatory UK SRS scope, the existing CSRD data infrastructure should significantly support compliance

Standalone large private

Standalone large private companies — those meeting Companies Act 2006 size criteria6 but without a listed parent or significant CSRD-reporting parent group — face the most uncertain MCR Strand 2 position.

Current obligations7:

• SECR applies — Streamlined Energy and Carbon Reporting under the 2018 regulations
• Strategic Report required under section 414A — content per FRC Guidance
• Section 414CB climate-related financial disclosure applies to certain large companies (pre-existing requirement)

Anticipated MCR Strand 2 position1:

• Standalone large private companies are the primary target population for Strand 2 extension
• Consultation will set the threshold definition determining scope
• Voluntary UK SRS application now provides advance preparation
• SECR will likely continue alongside or be subsumed by UK SRS for in-scope entities

PE-portfolio private

Private equity portfolio companies are typically structured as private limited companies. Where the portfolio company has issued listed bonds under UKLR 163, it is directly in scope of FCA CP26/5. Otherwise, current position mirrors standalone large private.

PE-specific considerations:

• PE owners increasingly require UK SRS-aligned or CSRD-aligned disclosure as part of ownership reporting, ahead of any regulatory requirement
• Pre-IPO portfolio companies typically build UK SRS capability ahead of listing in scope of CP26/5
• Coordination with PE owner on materiality assessment, target setting, and disclosure approach reduces duplicative work
• For PE owners with multiple UK portfolio companies, consistent UK SRS approach across the portfolio supports owner-level reporting and stakeholder engagement

Smaller private — out of scope

Smaller private companies and medium-sized entities below the relevant size thresholds are not in current UK SRS scope2 and are unlikely to be brought into scope by MCR Strand 21. The MCR Strand 1 simplification1 may actually reduce existing reporting obligations for these entities through Strategic Report exemption.

Indirect exposure remains:

• Value chain requests — in-scope counterparties (listed companies under CP26/5, or in due course private companies under MCR Strand 2) may request emissions data from suppliers to support their own Scope 3 disclosure
• Customer requirements — large customers may ask suppliers for emissions data, target alignment, and transition plan information
• PE acquisition pipeline — smaller private companies considering PE investment or eventual listing may build voluntary UK SRS capability to support transaction processes
• Lender requirements — financial institution lenders subject to UK SRS S2 paragraphs B59-B66 need financed emissions data for material exposures, including some private company borrowers

Voluntary UK SRS application

UK SRS2 permits voluntary application by any entity. The standards are issued as standalone reference documents under DBT publication, not solely tied to FCA listed company requirements3. A private company may choose to apply UK SRS S1, S2, or both, in part or in full, voluntarily.

Practical voluntary application:

• Full application — produce UK SRS-compliant disclosures under all relevant requirements (S1 framework, S2 climate, four pillars, scenario analysis, Scope 3)
• Phased application — apply specific elements (e.g. Scope 1 + 2 + material Scope 3, scenario narrative, climate risk identification) ahead of full requirements
• Aligned-but-not-compliant — adopt the four-pillar structure and methodology without claiming full UK SRS compliance, allowing flexibility on transition reliefs and partial application

Voluntary application provides capability advance, stakeholder credibility, and a structured response to value-chain requests from in-scope counterparties. It also positions the entity for any future mandatory application under MCR Strand 21.

Section 414CB(2A) and voluntary adopters

Section 414CB(2A) of the Companies Act 20064 allows the Secretary of State to designate a national reporting framework. DBT has confirmed in the FRC FAQ8 that UK SRS S2 has been designated under section 414CB(2A) — meaning entities applying UK SRS S2 do not need to separately satisfy the climate-related financial disclosure requirements in section 414CB(1)-(5).

The FRC FAQ8 confirms that this designation applies whether UK SRS S2 is applied on a mandatory basis (listed companies under CP26/53) OR on a voluntary basis. Voluntary adopters benefit from the clean Companies Act 20064 compliance pathway.

The practical effect for private companies voluntarily applying UK SRS S2:

• UK SRS S2 application satisfies the section 414CB(1)-(5) climate-related financial disclosure requirements
• No parallel disclosure under both regimes is required
• The voluntary adopter must clearly reference UK SRS S2 application in the NFSIS
• Other Strategic Report content continues alongside under section 414A

SECR continues alongside

SECR7 — the Streamlined Energy and Carbon Reporting regime introduced by the Companies (Directors' Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 — applies to large UK companies including large private companies. SECR continues alongside UK SRS2 until the MCR programme1 establishes how the two regimes interact.

The methodology overlap:

• Both require Scope 1 and Scope 2 emissions disclosure
• Both reference GHG Protocol Corporate Standard for measurement
• UK SRS adds Scope 3 disclosure (paragraph 29(a)) which SECR does not require
• UK SRS first-year transition relief allows alternative GHG measurement method — typically used to maintain SECR methodology continuity
• Where an entity reports under both, methodology should be consistent

The MCR consultation1 is expected to address how SECR and UK SRS interact for entities brought into UK SRS scope under Strand 2. Possible approaches: SECR continues for entities below the UK SRS threshold; SECR is subsumed by UK SRS for entities above; or SECR is modified to align more closely with UK SRS methodology.