UK SRS S1 — General Requirements for Sustainability-Related Financial Disclosures

What S1 Covers

UK SRS S1 is the general requirements standard. Where UK SRS S2 deals exclusively with climate, S1 establishes the framework for disclosing information about all sustainability-related risks and opportunities that could reasonably be expected to affect a company's prospects. This includes biodiversity and ecosystem impacts, water and marine resources, workforce conditions and human capital, supply chain due diligence, and governance and business ethics — in addition to climate.

S1 also defines the core concepts that underpin the entire UK SRS framework: the materiality definition, the connectivity principle linking sustainability disclosures to financial statements, the requirements for comparative information, and the statement of compliance rules.

Materiality Under S1

S1 defines sustainability information as material if omitting, misstating, or obscuring it could reasonably be expected to influence decisions made by primary users of the sustainability-related financial disclosures. This is a single materiality approach focused on enterprise value — the same approach used by IFRS S1 globally. It differs from the double materiality approach used in the EU Corporate Sustainability Reporting Directive (CSRD), which also considers outward impact on people and the environment.

For a detailed explanation, see UK SRS S1 Materiality.

The Connectivity Principle

S1 establishes the principle that sustainability-related financial disclosures must be connected to the financial statements. This is not a suggestion — it is a core requirement. Companies must explain how sustainability risks and opportunities relate to information in their financial statements, including the carrying amounts of assets and liabilities, the recognition and measurement of provisions, and the assumptions used in forward-looking estimates. This connectivity requirement is one of the most significant practical differences from TCFD, where sustainability reporting and financial reporting were typically prepared by separate teams with limited integration.

The Comply-or-Explain Approach

Under FCA CP26/5, UK SRS S1 applies on a comply-or-explain basis from financial years beginning on or after 1 January 2029 — two years after S2 becomes mandatory. This two-year gap is deliberate: it gives companies time to build the data collection infrastructure, governance structures, and cross-functional processes needed to report on sustainability topics beyond climate.

Companies that choose the “explain” path must provide specific explanations for each disclosure requirement they do not meet. A general statement that the company has chosen not to apply S1 is not sufficient. Each area of non-compliance must be individually identified and the reason for non-compliance must be explained.

Statement of Compliance

If a company claims compliance with UK SRS S1, it must meet every applicable disclosure requirement. Partial compliance is not recognised — the statement of compliance is all-or-nothing. Companies using the transitional relief period (before the 2029 comply-or-explain deadline) cannot claim compliance with S1 while relying on the relief. This is particularly important for companies considering voluntary early adoption.

Sustainability Topics Beyond Climate

S1 does not prescribe a fixed list of sustainability topics. Instead, it requires companies to identify the sustainability-related risks and opportunities that are material to their business using the materiality definition described above. In practice, this means a company's S1 disclosures will depend on its industry, geography, business model, and value chain. A mining company may need to disclose on water scarcity and biodiversity. A financial services firm may need to disclose on financed emissions and workforce diversity. A manufacturing company may need to disclose on supply chain labour practices and raw material sourcing.

The SASB Standards — referenced as a permissive (not mandatory) resource under UK SRS — provide sector-specific guidance on which sustainability topics are likely to be material for companies in different industries. While UK SRS does not require companies to use SASB, many will find it a useful starting point for identifying material topics.