UK SRS for boards · directors’ duties and liability
UK SRS for boards: what directors sign and answer for
UK SRS for boards comes down to three questions: what the directors approve, what the standard makes them disclose about their own oversight, and what they are liable for if it is wrong.
The answers sit in the Companies Act 2006, in UK SRS S2 ¶6, and in the FCA’s comply-or-explain rules from 2027.
Approval
The board approves the report that carries UK SRS
Section 414D(1) is plain: “The strategic report must be approved by the board of directors and signed on behalf of the board by a director or the secretary of the company.”
If a strategic report that does not comply with the Act is approved, each director who knew it did not comply, or was reckless as to whether it complied, and failed to take reasonable steps to secure compliance or to prevent its approval, commits an offence (s.414D(2)), punishable by a fine (s.414D(3)).
The directors’ report has the same structure under section 419, and it is where SECR disclosures sit today.
UK SRS disclosures are not required to be in the strategic report, but most listed companies will place them there, because that is where the Companies Act climate disclosures already are and where the safe harbour applies.
Under the FCA’s rules the annual financial report must then say where the UK SRS disclosures can be found (UKLR 6.6.6R(8)(c)).
Location is covered in full on UK SRS reporting guidance.
| Report | Approval | Offence |
|---|---|---|
| Strategic report | s.414D(1) | s.414D(2) |
| Directors’ report (SECR sits here) | s.419(1) | s.419(3)–(4) |
Section 463
The Companies Act safe harbour, subsection by subsection
Section 463(1) lists the reports it covers: the strategic report, the directors’ report, the directors’ remuneration report and any separate corporate governance statement.
Subsection (2) makes a director liable to compensate the company for loss caused by an untrue or misleading statement in one of those reports, or by an omission of anything required.
Subsection (3) confines that: the director is liable only if they knew the statement was untrue or misleading, or were reckless as to whether it was, or knew the omission was dishonest concealment of a material fact.
Subsection (4) removes liability to anyone else resulting from reliance on the report, and subsection (5) extends that to civil remedies and rescission.
Subsection (6) leaves liability for civil penalties and criminal offences untouched.
The government confirmed in its UK SRS response, Chapter 3, that UK SRS disclosure within the strategic report brings section 463 automatically into play.
The September 2026 consultation repeats the boundary: unless section 463 is expanded, only UK SRS disclosures included within the strategic report will be covered (¶160).
It adds that the government believes the knowledge and recklessness tests remain appropriate for UK SRS, as they already apply to forward-looking and estimated data in the strategic report (¶161).
Set the location, state of mind and claimant in the panel to see which subsection answers the question.
Director liability check · s.463 and s.414D
- Not liableNo s.463 liability for an honest statementLiability to the company arises only on knowledge, recklessness or dishonest concealment. An honest, careful mistake is outside it.CA 2006 s.463(3)
- UnaffectedCivil penalties and criminal offences are not touchedThe safe harbour limits civil liability to the company and to reliance claims; it does not affect liability for a civil penalty or a criminal offence.CA 2006 s.463(6)
- ApprovalThe board approves and signs the strategic reportThe offence needs knowledge or recklessness about non-compliance plus a failure to take reasonable steps.CA 2006 s.414D(1)–(3)
A map of the statute, not legal advice; the FCA’s listing-rule and market-abuse regimes sit outside it.
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What the board discloses about itself
UK SRS S2 ¶6: the governance disclosures
| UK SRS S2 | The board must be able to say |
|---|---|
| ¶6(a) | Which governance body or individual is responsible for oversight of climate-related risks and opportunities |
| ¶6(a)(i) | How that responsibility is reflected in terms of reference, mandates, role descriptions and policies |
| ¶6(a)(ii) | How the body decides whether the skills and competencies to oversee climate strategy are available or will be developed |
| ¶6(a)(iii) | How and how often it is informed about climate-related risks and opportunities |
| ¶6(a)(iv) | How it takes them into account in strategy, major transactions and risk management, including trade-offs |
| ¶6(a)(v) | How it oversees the setting of climate targets and monitors progress, including links to remuneration |
| ¶6(b) | Management’s role: any delegated position or committee, how it is overseen, and the controls that support it |
| ¶29(g) | How climate considerations factor into executive remuneration, and the percentage of remuneration linked to them |
Paragraph 6(a)(ii) is the one boards most often misread.
It does not require the board to have climate expertise; it requires the company to disclose how the board determines whether the skills are there or will be developed.
An honest answer that the board relies on external advice and is building knowledge is a disclosure; silence is a gap.
Some boards bring in specialist support on a part-time basis; fractional.quest lists fractional sustainability roles.
These requirements come from IFRS S2 unchanged; the UK amendments do not touch governance.
The four pillars together are on the four pillars, and the standard in full on UK SRS S2.
Comply or explain
The board’s new decision: what to explain
From accounting periods beginning on or after 1 January 2027, listed companies in UKLR 6, 14, 15, 16 and 22 report against UK SRS or explain (PS26/19).
The consultation, CP26/5, had proposed mandatory UK SRS S2; the final rules put all of UK SRS on comply or explain instead.
That moves a judgement to the board: which requirements to meet in year one, and what to say about the rest.
The FCA framed the reason for the change: where issuers do not provide financially material information, a proportionate explanation of their reasoning and judgement can itself be useful to investors (¶1.3).
Two reliefs soften the first years: one year without Scope 3 and two years of climate-only reporting under UK SRS S1, each stated rather than explained (¶¶3.14, 3.20).
The board also approves the assurance statement and, for UKLR 6, 16 and 22, the transition-plan statement (UKLR 6.6.6R(8)(d)–(e)).
The dates for each category are on UK SRS deadline; the sequence is on the UK SRS timeline and the S1 and S2 timeline.
(i) A summary of the UK SRS S2 requirements not met.
(ii) The reasons for not making those disclosures.
(iii) Any steps taken or planned to make them in future.
UKLR 6.6.6R(7A)(b).
The steps have no required timeframe.
Controls and committees
Provision 29 and the audit committee
The UK Corporate Governance Code 2024 applies to companies in the commercial companies and closed-ended investment funds categories, from financial years beginning on or after 1 January 2025.
Provision 29 has applied since financial years beginning on or after 1 January 2026.
It asks the board to declare the effectiveness of material controls, and the FRC says those controls extend to narrative and ESG reporting controls.
For a company the Code applies to, that brings the controls over UK SRS data within a board declaration, even though the Code itself contains no sustainability reporting requirement.
The FRC says it left one out deliberately, because the Companies Act and listing rules already require climate disclosures.
UK SRS does not say which committee oversees the disclosures; S2 ¶6 asks the company to name whichever body does.
An audit committee that takes it on inherits the connected-information problem: the climate assumptions must be consistent with the financial statements, to the extent possible, under UK SRS S1 ¶23.
If the company commissions assurance, ISSA (UK) 5000 is effective for periods beginning on or after 15 December 2026; the choices are set out on UK SRS assurance.
In the boardroom
Questions the board should be asking management
| Question | Why it matters | Provision |
|---|---|---|
| Which listing category are we in, and when is our first period? | Scope and timing follow the category | PS26/19 ¶¶3.6, 3.12 |
| Which S2 requirements will we meet in year one, and which will we explain? | The board approves the explanation | UKLR 6.6.6R(7A) |
| Are we using the Scope 3 and climate-first reliefs? | Each is a statement, not an explanation | PS26/19 ¶¶3.14, 3.20 |
| Where will the disclosures sit? | Location decides whether s.463 applies | CA 2006 s.463(1); UKLR 6.6.6R(8)(c) |
| Are the climate assumptions consistent with the accounts? | Connected information | UK SRS S1 ¶¶21–24 |
| How do we decide we have the skills to oversee this? | It is itself a disclosure | UK SRS S2 ¶6(a)(ii) |
| Will we obtain assurance, over what and at what level? | The annual report says so either way | UKLR 6.6.6R(8)(d) |
| Do we have a transition plan, and where is it? | A statement for UKLR 6, 16 and 22 | UKLR 6.6.6R(8)(e) |
| Can we say our disclosures comply with UK SRS? | Only if every requirement is met | UK SRS S1 ¶¶72, 73A |
The record
Documenting oversight, and moving from TCFD
The safe harbour turns on the director’s state of mind, so a record of what the board asked and was told is the evidence that a statement was honestly made.
Board minutes, committee papers and the terms of reference that S2 ¶6(a)(i) asks about are that record.
The FCA says its new rules replace the TCFD-aligned disclosures (PS26/19 ¶1.10); the governance pillar is the one that changes least.
A board that already reports under TCFD will find the same four pillars, with more specific questions about skills, information flow and remuneration.
The FRC’s FAQs summarise the reporting landscape for companies moving between regimes.
The standards were developed with advice from the government’s technical advisory committee, whose terms are in the framework for developing UK SRS.
What changes from TCFD is on UK SRS vs TCFD; the EU comparison is on UK SRS vs CSRD.
Emissions measurement follows the GHG Protocol Corporate Standard; Scope 3 is on Scope 3 under UK SRS, and SECR’s relationship to UK SRS on SECR and UK SRS.
Transition plans, which the board may be asked to approve, are on transition plans and UK SRS; banks and insurers should also read UK SRS for financial services.
For the standards themselves, see what is UK SRS, UK SRS S1 and the UK SRS hub; for the law around them, UK SRS legislation.
Scope is on UK SRS thresholds, voluntary use on voluntary UK SRS reporting, the programme on the UK SRS compliance guide, short answers on the UK SRS FAQ, and the wider field on sustainability reporting.
To talk a board briefing through, book a free 15-minute call.
Frequently asked
Questions people ask
What is section 463 of the Companies Act 2006?
A limit on directors’ liability for statements in the strategic report, the directors’ report, the directors’ remuneration report and any separate corporate governance statement.
A director is liable to compensate the company for loss caused by an untrue or misleading statement or an omission only if they knew the statement was untrue or misleading, were reckless as to that, or knew the omission was dishonest concealment of a material fact.
No one other than the company can hold them liable for reliance on the report.
Does section 463 protect UK SRS disclosures?
Where they sit in the strategic report, yes: the government confirmed in February 2026 that UK SRS disclosure in the strategic report brings section 463 automatically into play.
The September 2026 consultation adds that, unless section 463 is expanded, only UK SRS disclosures within the strategic report are covered.
Material placed in a separate report is outside it.
Does section 463 protect against fines or prosecution?
No. Section 463(6) says it does not affect liability for a civil penalty or for a criminal offence.
Do directors have to approve UK SRS disclosures?
If they are in the strategic report, yes: section 414D requires the strategic report to be approved by the board and signed on its behalf by a director or the secretary.
A director who knew it did not comply with the Act, or was reckless as to that, and failed to take reasonable steps commits an offence.
What does UK SRS require boards to disclose about themselves?
UK SRS S2 ¶6 asks which body or individual oversees climate-related risks and opportunities, how that appears in terms of reference, how the body decides whether it has the skills, how and how often it is informed, how it takes climate into account in strategy and major transactions, and how it oversees targets and related remuneration. It does not prescribe any competence.
Does the UK Corporate Governance Code require ESG reporting?
No. The FRC deliberately left a sustainability reporting requirement out of the 2024 Code to avoid duplicating the Companies Act and listing rules.
Provision 29, which applies from financial years beginning on or after 1 January 2026, asks the board to declare the effectiveness of material controls, and the FRC says those extend to narrative and ESG reporting controls.
Is UK SRS mandatory for listed company boards?
Not as a mandatory standard.
From accounting periods beginning on or after 1 January 2027, listed companies in UKLR 6, 14, 15, 16 and 22 must report against UK SRS or explain what they have not disclosed, why, and what they plan to do about it.
Directors approve those explanations with the rest of the report.
Should the audit committee oversee UK SRS disclosures?
Nothing in UK SRS or the FCA’s rules assigns the task to a particular committee; UK SRS S2 ¶6 asks the company to identify whichever body or individual has oversight.
Many boards give it to the audit committee because the committee already oversees the strategic report and controls.
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.
- Financial Conduct AuthorityPS26/19 — Aligning listed issuers’ sustainability disclosures with international standards (30 September 2026)
Final rules: comply or explain against UK SRS, UKLR 6, 14, 15, 16 and 22, periods from 1 January 2027.
- Financial Conduct AuthorityPS26/19 PDF — ¶¶1.2, 1.7, 1.10, 2.44–2.51, 3.6–3.24 and Appendix 1 (UKLR 6.6.6R(7A), (7B), (8)(c)–(e))
The made rule text and the reliefs.
- Financial Conduct AuthorityCP26/5 consultation page
- Financial Conduct AuthorityFCA Handbook — UK Listing Rules
- Department for Business and TradeUK Sustainability Reporting Standards: UK SRS S1 and UK SRS S2 (25 February 2026)
The publication page for both standards; voluntary for any entity.
- Department for Business and TradeUK SRS S2 — ¶¶5–7 (governance), ¶29(g) (remuneration)
- Department for Business and TradeGovernment response to the consultation on UK SRS — Chapter 3 (s.414CB(6); s.463)
UK SRS S2 confirmed as a national reporting framework; the s.463 safe harbour follows the strategic report.
- Department for Business and TradeFramework for developing UK Sustainability Reporting Standards (the TAC’s terms)
- Department for Business, Innovation, Science and TradeModernising corporate reporting — consultation document ¶¶160–161
“Only UK SRS disclosures that are included within the strategic report will be covered” unless s.463 is expanded.
- legislation.gov.ukCompanies Act 2006, s.463 — liability for false or misleading statements in reports
Liability to the company only, and only on knowledge, recklessness or dishonest concealment.
- legislation.gov.ukCompanies Act 2006, s.414D — approval and signing of the strategic report
- legislation.gov.ukCompanies Act 2006, s.419 — approval and signing of the directors’ report
- legislation.gov.ukCompanies Act 2006, s.414CB — (A1) the duty, (2A) the eight disclosures, (6) national frameworks
- Financial Reporting CouncilUK Corporate Governance Code 2024 — Provision 29
Applies to financial years beginning on or after 1 January 2026.
- Financial Reporting CouncilSustainability Reporting Developments: FAQs (last updated 26 February 2026)
- Financial Reporting CouncilISSA (UK) 5000 — ¶¶9, 10, 11, 15, 18, 20, 34, 87, 190, 198
Issued 12 November 2025; effective for periods beginning on or after 15 December 2026; binds by representation.
- IFRS FoundationIFRS S2 — Climate-related Disclosures
- GHG ProtocolCorporate Standard (2004)
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