Who this guide is for
This guide is for UK-listed companies2 in scope of FCA CP26/52 — those in UKLR categories 6, 16 and 222 preparing for proposed mandatory climate-related disclosures1 from accounting periods beginning on or after UK SRS deadline2 (UKLR 14 and 15 companies are also within CP26/5’s scope but would instead make a signposting statement about the overseas or voluntary standards they follow).
For broader context on all UK sustainability obligations, see our comprehensive ESG reporting requirements UK guide.
The pathway also serves voluntary adoption — any UK entity may apply UK SRS S1 or UK SRS S21 from 25 February 20261 on a voluntary basis9.
Many companies are doing so to build capability before the mandatory cycle begins.
If you are unsure whether the rules will apply to you, start with who must comply with UK SRS and the disclosure summary in UK SRS requirements.
The compliance pathway
Full readiness for mandatory UK SRS S2 reporting1 takes 12 to 18 months of focused work.
Companies that began voluntary preparation in early 20269 are now in months 6 to 12 of the pathway, with first proposed mandatory accounting period beginning 1 January 20272 and first reports publishing in spring 2028 for December 2027 year-ends2.
The seven steps run partly in sequence and partly in parallel.
Gap analysis and governance setup come first; data systems run as a long arc through months 3 to 12; materiality assessment depends on industry context but can begin once gap analysis surfaces relevant topics; voluntary pilot in months 9 to 15 surfaces operational issues before mandatory cycle; assurance engagement under ISSA (UK) 50003 overlaps the pilot for trial assurance; then proposed mandatory reporting from 1 January 20272.
The FCA Policy Statement expected autumn 20262 may modify scope or timing from the CP26/5 proposals2, but the underlying work remains the same regardless of final rule amendments.
For a month-by-month breakdown of the 2026 preparation window itself, see our UK SRS 2026 preparation hub.
UK SRS preparation checklist
The seven steps below compress the full pathway into a working checklist.
Each links to the detailed guidance for that stage; the full cluster is indexed from the UK SRS hub.
- Confirm scope — check whether you sit in UKLR categories 6, 16 or 22 (515 companies proposed to comply with UK SRS) or in UKLR 14 or 15 (89 companies on the lighter-touch signposting route) of the ~600 listed companies CP26/5 proposes to capture2. See who must comply with UK SRS.
- Run a UK SRS gap analysis mapping existing TCFD-aligned disclosures against the four S2 pillars1.
- Set board governance — oversight responsibility, committee terms of reference, and remuneration linkage per UK SRS S2 paragraphs 5-71. See UK SRS for boards.
- Build emissions data systems to the GHG Protocol Corporate Standard5, prioritising Scope 3 ahead of comply-or-explain treatment from accounting periods beginning 1 January 20282.
- Test readiness with the UK SRS compliance calculator, then run a voluntary pilot disclosure cycle9.
- Engage an assurance provider under ISSA (UK) 5000, effective for engagement periods commencing on or after 15 December 20263.
- Monitor the FCA Policy Statement expected autumn 20262 against the UK SRS timeline and deadline schedule.
From TCFD to UK SRS S2
Step 1 — Gap analysis
Gap analysis maps existing climate disclosures (typically TCFD-aligned under the previous UK Listing Rules2) against the specific S2 requirements requirements1 across all four pillars.
UK SRS S2 expands TCFD substantially: scenario analysis becomes a hard requirement under paragraph 221 rather than a recommendation; supply chain emissions across the 15 GHG Protocol categories6 become required (subject to first-year implementation timeline and a CP26/5 comply-or-explain treatment from 20282).
Quantitative financial-effect disclosure becomes required1 with qualitative-only relief available only where measurement uncertainty is genuinely high; and financed emissions disclosures1 are imposed on financial services.
The gap analysis output is a prioritised remediation plan covering the four pillars: governance (paragraphs 5-71), strategy (paragraphs 8-231), risk management (paragraphs 24-261), metrics and targets (paragraphs 27-371).
Governance Requirements Under UK SRS S2
Board oversight responsibility
Explicit identification of the body or individual with climate oversight responsibility
Controls and processes
Document the controls and processes used for climate-related risk management
Skills and competencies
Demonstrate skills and competencies of those involved in governance oversight
Executive remuneration linkage
Show how climate performance considerations affect executive remuneration where relevant
Committee terms of reference
Update audit committee or risk committee terms to include sustainability oversight
Step 2 — Governance setup
Governance disclosures under UK SRS S2 paragraphs 5-71 require explicit identification of the body or individual with oversight responsibility, the controls and processes used, the skills and competencies of those involved, and consideration of trade-offs in major transactions1.
Most companies need to update audit committee or risk committee terms of reference to include sustainability oversight, and to demonstrate how climate performance considerations affect executive remuneration where relevant1.
The board's role under Companies Act 2006 section 414CB7 in approving the strategic report extends to sustainability disclosures.
Section 463 of the Companies Act 20068 provides a safe harbour for honest mistakes in forward-looking statements within the strategic report — relevant because UK SRS S2 requires forward-looking scenario analysis and transition plan disclosures1.
Step 3 — Data systems
UK SRS S2 paragraph 29(a)1 requires absolute gross GHG emissions disclosure in metric tonnes of CO2 equivalent, classified by Scope 1, Scope 2, and Scope 31.
Measurement must follow the GHG Protocol Corporate Standard (2004)5 unless a different method is required by a jurisdictional authority1.
Scope 1 and Scope 2 data systems are typically already in place for SECR7 reporters.
The major build is Scope 3 requirements across the 15 categories of the GHG Protocol Corporate Value Chain Standard6 — purchased goods and services (category 1), capital goods (category 2), upstream and downstream transportation (categories 4 and 9), use of sold products (category 11), and category 15 investments for asset managers6.
The first-year transition relief in UK SRS S21 defers Scope 3 disclosure to the second year, and FCA CP26/52 adds an optional additional one-year deferral2.
This provides breathing space — but the underlying supplier engagement and data infrastructure work takes 12 to 18 months regardless, so it must start now.
Single Materiality Focus
Cash flows and access to finance
Information is material if its omission could reasonably influence decisions of primary users (investors, lenders, creditors)
Primary users
Investors, lenders, and other creditors are the primary audience for materiality assessment
SASB permissive reference
Companies 'may refer to' industry-based metrics (UK softens IFRS S2 'shall' to 'may')
Climate threshold
All climate matters meeting materiality threshold require disclosure regardless of SASB coverage
Step 4 — Materiality assessment
Materiality under UK SRS1 is single (financial) materiality: information is material if its omission, misstatement, or obscuring could reasonably be expected to influence decisions made by primary users of general purpose financial reports (UK SRS S1 ¶18), judged by reference to the entity’s cash flows, access to finance or cost of capital (¶3)1.
This contrasts with the double materiality used in the EU CSRD, which adds an outside-in perspective on company impacts regardless of financial effect.
Learn more follows the S1 standard single materiality approach12.
SASB Standards are referenced as a permissive resource1 — companies "may refer to" industry-based metrics, not "shall refer to" (the UK softens the IFRS S2 reference from "shall" to "may"1).
Materiality assessment under UK SRS S112 drives topic identification for S1 disclosures; for S2 specifically, all climate matters that meet the materiality threshold require disclosure regardless of SASB.
Step 5 — Voluntary pilot
Voluntary application of UK SRS S2 to a current accounting period1 — before proposed mandatory application from 1 January 20272 — surfaces operational issues at low risk.
The pilot draft is internal-use only; nothing requires publication of the pilot disclosure.
Scenario analysis under paragraph 221 typically gets the most operational scrutiny during the pilot.
The standard requires rigour commensurate with exposure1 — entities with significant climate exposure cannot rely on qualitative narrative scenarios.
Common frameworks include NGFS scenarios11 and IEA Net Zero by 2050.
At least one scenario must be aligned with the latest international agreement on climate change1.
Step 6 — Assurance engagement
The Financial Reporting Council published ISSA (UK) 50003 — the UK sustainability assurance standard — on 12 November 20253.
It is effective for engagements on periods beginning on or after 15 December 2026, or as at a specific date on or after that day — earlier application is permitted3 — giving assurance providers time to align with the new framework before UK SRS S2 proposed mandatory disclosures begin.
It remains voluntary throughout: mandatory for nobody3.
FCA CP26/52 does not propose to make sustainability assurance mandatory at all — only that in-scope companies state whether they obtained it, and if so, by whom, to what level, and against which standards.
The FCA Policy Statement expected autumn 20262 may return to the question of mandatory assurance, but it has not been decided.
Trial assurance run during the pilot stage surfaces methodology and evidence-gathering issues before they affect the mandatory cycle.
Step 7 — Mandatory reporting
From accounting periods proposed to begin on or after compliance deadline2, in-scope companies would report against climate-related disclosures1 within the strategic report under Companies Act 2006 section 414CB7 — subject to the FCA Policy Statement, not yet published2.
First reports publish in spring 2028 for December 2027 year-ends2.
UK SRS S11 applies on a comply-or-explain basis from 1 January 20292 for the broader sustainability topics.
The foundational elements of S1 — materiality definition, value chain scope, connected information (¶¶21–24)1 — apply from January 2027 alongside S21 because S2 cannot be applied without them.
The four hardest implementation areas
Professional services commentary identifies these as the most resource-intensive aspects of UK SRS S2 compliance.
Governance disclosures lead readiness; metrics and value-chain emissions remain the principal gaps.
The hardest implementation areas
Four areas emerge from professional services commentary on early voluntary adoption as the most resource-intensive.
1. Scope 3 emissions data along the value chain
Companies typically report 12-18 months of supplier engagement work before full Scope 3 disclosure is achievable.
The CP26/5 comply-or-explain treatment2 plus first-year deferral1 provides breathing space, but data infrastructure work needs to start now.
Each of the 15 GHG Protocol categories6 requires specific methodological approaches6, with category 1 (purchased goods and services) and category 11 (use of sold products) typically generating the largest emissions volumes6.
2. Climate scenario analysis with quantified financial effects
UK SRS S2 paragraph 221 requires scenario analysis with rigour commensurate with exposure.
Companies with significant climate exposure can no longer rely on qualitative narrative scenarios — quantified analysis with explicit assumptions is expected1.
At least one scenario must be consistent with the latest international agreement on climate change1, typically interpreted as scenarios limiting warming to 1.5°C in line with the Paris Agreement.
NGFS scenarios11 provide a common framework, but entities may use alternative credible scenarios with proper justification1.
3. Connected information between climate disclosures and financial statements
Connected information under UK SRS S1 ¶¶21–241 demands coordination between sustainability and finance teams, with data and assumptions consistent across reports.
Connected information is core to UK SRS S1, not optional1.
This requires deep ESG integration across business processes rather than siloed sustainability reporting.
This includes consistency in scenario assumptions used for both climate disclosure and impairment testing1, alignment of climate risk identification with financial risk management1, and integration of sustainability metrics into financial planning where material12.
4. Financed emissions for financial institutions
Asset managers, banks, and insurers face the most extensive S2 requirements under UK SRS S2. UK SRS S2 paragraph B59A
(a UK-specific addition) allows reporting financed emissions for a different reporting period than the financial statements where alignment is impracticable, with disclosure of reasons.
Industry classification choices and methodology selection materially affect the disclosed figures1.
The Partnership for Carbon Accounting Financials (PCAF) methodology is commonly referenced1, though UK SRS does not mandate specific approaches beyond the requirement for methodological transparency1.
