What's the difference between S1 and S2?

S1 provides general requirements for all sustainability-related financial disclosures, while S2 is specifically focused on climate-related disclosures. S1 sets the framework and methodology; S2 applies that framework to climate risks and opportunities.

Are UK SRS S1 and S2 mandatory?

Currently voluntary for all UK entities. The FCA has proposed making S2 climate disclosures mandatory from 1 January 2027 for ~500 listed issuers, with S1 non-climate disclosures on comply-or-explain basis from 1 January 2029.

Can a private company adopt UK SRS S1 and S2 voluntarily?

Yes, any UK entity can adopt UK SRS voluntarily. Many are doing so to prepare for potential future mandatory requirements or to meet stakeholder expectations.

Do I have to apply S1 and S2 together?

No. UK SRS S2 includes a 'climate-only relief' (paragraph E3) allowing entities to apply S2 climate disclosures while deferring other S1 requirements on comply-or-explain basis.

How do UK SRS S1 and S2 differ from IFRS S1 and S2?

UK SRS has six key amendments: removed effective dates, made SASB references optional ('may' not 'shall'), removed time-bound transitional reliefs, removed first-year publication relief, added UK-specific financed emissions approach, and included UK legal references.

Will UK SRS S1 and S2 replace SECR?

No immediate replacement planned. SECR remains in force, though future government reviews may consider consolidation. UK SRS provides much more comprehensive disclosure requirements than current SECR obligations.

UK SRS S1 and S2 — The Independent Reference Guide | Sustainability Reporting Standards

UK SRS at a Glance

Key facts about the UK Sustainability Reporting Standards

Feb 2026

Standards Published

Jan 2027

S2 Mandatory

515

Companies Affected

2 Standards

S1 & S2

UK SRS S1 and S2 in 60 seconds

UK SRS S1

General requirements for disclosure of sustainability-related financial information. Provides the framework and methodology for all sustainability reporting.

General RequirementsMateriality FrameworkConnectivity Principle

UK SRS S2

Climate-related disclosures applying S1's framework specifically to climate risks and opportunities, including emissions and transition plans.

Climate-SpecificGHG EmissionsScenario Analysis

Key Numbers: Published 25 February 2026 by DBT. Currently voluntary. FCA-proposed mandatory for ~500 listed issuers from 1 January 2027 (S2), with S1 non-climate on comply-or-explain from 1 January 2029. Six UK amendments differentiate from IFRS S1 and S2.

Why S1 and S2 came together

Evolution Path

TCFD (2017)Task Force on Climate-related Financial Disclosures established climate reporting framework

ISSB (2021)International Sustainability Standards Board created global baseline standards

UK Endorsement (2026)UK adopted and amended IFRS S1 and S2 as UK SRS

The relationship is fundamental: S1 is the framework, S2 is its first application. S1 establishes general requirements for materiality assessment, reporting boundaries, and disclosure principles that apply to all sustainability topics. S2 then applies these principles specifically to climate-related risks and opportunities.

This two-standard approach allows entities to start with climate (using S2's climate-only relief) while building capabilities for broader sustainability reporting under S1. Future topic-specific standards (S3, S4, etc.) will follow the same pattern, applying S1's framework to specific sustainability themes.

How S1 and S2 are structured (the four pillars)

The Four Pillars of UK SRS

Governance

Board oversight, management processes, and controls around sustainability

Governance Requirements Board Responsibilities

Strategy

Business model, strategy, and decision-making incorporating sustainability

Strategy Guide Business Model Integration

Risk Management

Processes for identifying, assessing, and managing sustainability risks

Risk Assessment Climate Risks

Metrics & Targets

Performance metrics, targets, and progress measurement

Key Metrics Performance Tracking

These four pillars form the foundation of UK SRS compliance, closely aligned with TCFD recommendations.

Learn more about the Four Pillars

Both standards are built on the same four-pillar framework, inherited from TCFD. The pillars provide consistency across all sustainability topics while allowing topic-specific guidance.

Governance

Oversight and accountability for sustainability-related risks and opportunities

S1 Focus: General governance framework for all sustainability matters

S2 Focus: Board oversight specifically for climate-related issues

Strategy

How sustainability affects business model and strategy

S1 Focus: Integration of sustainability considerations into strategic planning

S2 Focus: Climate resilience and scenario analysis

Risk Management

Identification, assessment and management of sustainability risks

S1 Focus: General risk management processes for sustainability

S2 Focus: Climate-specific risk identification and management

Metrics & Targets

Quantitative measures and progress tracking

S1 Focus: Key performance indicators for sustainability performance

S2 Focus: GHG emissions, climate metrics and transition plans

UK SRS S1 — the General Requirements

Core Concepts

Single Materiality

Enterprise value perspective - impacts that could affect the entity's cash flows, access to finance, or cost of capital.

Connectivity Principle

Sustainability disclosures must connect to information in financial statements and management commentary.

Time Horizons

Short, medium, and long-term considerations aligned with entity's strategic planning cycles.

Statement of Compliance

Clear declaration of conformity with UK SRS requirements, including any reliefs applied.

Climate-Only Relief (Paragraph E3): Entities can apply UK SRS S2 for climate disclosures while deferring other S1 requirements on comply-or-explain basis. This relief enables climate-first implementation approach.

UK SRS S2 — Climate-related Disclosures

Climate Application

Physical & Transition Risks

Acute and chronic physical risks from climate change; transition risks from low-carbon economy shift.

Climate Opportunities

Business opportunities from climate action - new markets, efficiency gains, resilience building.

Scenario Analysis

Climate-related scenario analysis using recognised frameworks like NGFS or IEA scenarios.

GHG Emissions

Scope 1, 2, and 3 emissions following GHG Protocol with 15 Scope 3 categories.

Scope 3 Reliefs (C3, C4): UK SRS S2 includes specific reliefs for Scope 3 emissions measurement and disclosure, with comply-or-explain provisions for complex categories.

How S1 and S2 work together

UK SRS Implementation Timeline

Feb 2026

Final Standards

UK SRS S1 & S2 published by DBT

Jan 2027Current Phase

S2 Mandatory

Climate disclosures required

Jan 2028

Scope 3 Transition

Supply chain emissions

Jan 2029

S1 Comply-or-Explain

All sustainability topics

The Climate-First Approach

Start with S2 Only

Use paragraph E3 climate-only relief to apply S2 climate disclosures while deferring other S1 requirements. Statement of compliance notes relief applied.

Gradual S1 Integration

Progressively apply S1 requirements to other sustainability topics (biodiversity, social, governance) as capabilities develop.

Full Compliance

Eventually achieve full S1 and S2 compliance across all material sustainability topics with consolidated statement of compliance.

Statement of Compliance Implications

The cumulative effect of using multiple reliefs must be clearly disclosed. Each relief applied affects the statement of compliance, requiring specific explanation of what requirements are deferred and why.

Example Statement

"This report complies with UK SRS S2 climate-related disclosures. We have applied the climate-only relief under paragraph E3 and deferred other UK SRS S1 requirements on comply-or-explain basis pending development of broader sustainability reporting capabilities."

Future Topic-Specific Standards

When future UK SRS standards arrive (S3 for biodiversity, S4 for social, etc.), they will follow the same pattern: applying S1's framework to specific topics. This modular approach allows entities to adopt standards progressively while maintaining consistency.

The six UK amendments to IFRS S1 and S2

UK SRS diverges from the ISSB baseline in six specific areas, detailed in the government consultation response Annex A.

1Removal of effective dates

UK SRS removes specific effective dates, allowing for flexible implementation timing under UK regulatory framework.

gov.uk consultation response Annex A

2SASB references changed from 'shall' to 'may'

Makes SASB Standards guidance optional rather than mandatory, providing flexibility in application.

UK SRS S1 amendments

3Removal of time references for transitional reliefs

Eliminates specific time-bound transitional relief provisions to align with UK implementation approach.

UK SRS S1 and S2 amendments

4Removal of IFRS S1 E4 first-year publication relief

UK SRS does not include the first-year relief available under international standards.

UK SRS S1 paragraph amendments

5Financed emissions 'explain' mechanism in S2

UK-specific approach to financed emissions disclosure with explain mechanism for financial services.

UK SRS S2 financed emissions provisions

6UK-specific legal and regulatory references

References to UK Companies Act, FCA requirements, and UK legal framework throughout both standards.

UK SRS S1 and S2 legal provisions

Who must comply, and when

UK SRS Implementation Timeline

Key dates and milestones for UK Sustainability Reporting Standards compliance

28 February 2026

UK SRS Standards Published

CompletedHigh Impact

Final UK Sustainability Reporting Standards S1 and S2 published by DBT/DBT

StandardsAll entities

1 April 2026

Voluntary Adoption Period Begins

CurrentMedium Impact

Entities can begin voluntary adoption of UK SRS ahead of mandatory requirements

AdoptionAll entities

30 June 2026

FCA Final Rules Expected

CurrentHigh Impact

FCA expected to publish final rules on mandatory UK SRS for listed companies

RegulationListed companiesLarge PIEs

1 January 2027

UK SRS S2 Becomes Mandatory

UpcomingHigh Impact

Climate-related disclosures mandatory for premium listed companies and large PIEs

CompliancePremium listedLarge PIEsTCFD entities

1 January 2028

Scope 3 Carve-out Ends

WarningHigh Impact

Scope 3 emissions reporting becomes mandatory (after initial year carve-out)

Scope 3All in-scope entities

30 April 2028

First UK SRS S2 Reports Due

UpcomingHigh Impact

First annual reports including UK SRS S2 climate disclosures published

ReportingPremium listedLarge PIEs

1 January 2029

UK SRS S1 Comply-or-Explain

UpcomingMedium Impact

General sustainability disclosures on comply-or-explain basis

CompliancePremium listedLarge PIEs

UK SRS Compliance Readiness Assessment

1. What is your annual revenue?

2. What is your listing status?

3. How many employees do you have?

4. Current sustainability reporting level?

Current Status: Voluntary

UK SRS S1 and S2 are currently voluntary for all UK entities. Any organization can adopt them to prepare for future requirements or meet stakeholder expectations.

FCA-Proposed Scope: ~500 UK Listed Issuers

Under FCA CP26/5, UK SRS would become mandatory for companies with securities admitted to trading on:

Premium Main Market (UKLR 6)
Standard Main Market equity (UKLR 14)
Standard Main Market debt (UKLR 15)
Standard Main Market specialist securities (UKLR 16)
Professional Securities Market (UKLR 22)

Out of scope: AIM companies, private companies, and debt-only issuers (unless also equity listed).

Phased Implementation Dates

25 February 2026completed

UK SRS S1 and S2 Published

Final standards published by Department for Business and Trade (DBT)

1 January 2027upcoming

S2 Climate Disclosures Mandatory

Climate-related disclosures required for ~500 UK listed issuers (FCA CP26/5 proposal)

1 January 2028future

Scope 3 Comply-or-Explain

Scope 3 emissions reporting on comply-or-explain basis

1 January 2029future

S1 Non-Climate Comply-or-Explain

General sustainability reporting on comply-or-explain basis

Future Expansion Expected: Government MCR review and potential Companies Act extension anticipated later in 2026 may broaden scope to additional entities.

How UK SRS interacts with existing UK regimes

vs SECR (Streamlined Energy and Carbon Reporting)

UK SRS provides significantly more comprehensive requirements than SECR. No immediate replacement planned, but future consolidation likely.

Parallel obligations

vs 2022 Climate-related Financial Disclosure Regulations

UK SRS S2 substantially exceeds current climate disclosure regulations. May replace or supplement existing requirements.

Enhanced requirements

vs FCA TCFD-aligned Listing Rules

UK SRS S2 is being positioned to replace current TCFD listing requirements, providing more detailed and standardised framework.

Replacement intended

vs Companies Act Strategic Report (s414CB, s463)

s414CB designation removes duplication between UK SRS and strategic report. s463 provides safe harbour protection.

Legal integration

vs CSRD/ESRS (for groups with EU operations)

Different materiality approaches (single vs double) require careful consideration for multinational groups.

Parallel compliance

How UK SRS interacts with international regimes

vs IFRS S1 and S2

UK SRS closely aligned with IFRS baseline but includes six UK-specific amendments. High degree of compatibility for multinationals.

Framework alignment95%

Content divergence6 amendments

vs CSRD/ESRS

Fundamental difference in materiality approach. UK SRS uses single materiality (enterprise value), ESRS uses double materiality (impact + enterprise value).

Materiality approachDifferent

Scope coverageOverlapping

Multinational Implementation Considerations

UK/IFRS alignment enables global consistency in most areas
CSRD double materiality requires separate assessment process
GHG Protocol consistency across all regimes
Timing differences require careful transition planning

The legal protections — s463 and s414CB

Section 463 Safe Harbour

Companies Act 2006 s463 provides safe harbour protection for strategic report content, including sustainability disclosures.

Protection: Liability limitation for forward-looking statements

Scope: Strategic report disclosures made in good faith

Importance: Enables scenario analysis and target-setting

Section 414CB Designation

Companies Act 2006 s414CB removes duplication between UK SRS disclosures and strategic report requirements.

Function: Avoids duplicating sustainability information

Mechanism: Cross-reference to UK SRS disclosures

Benefit: Streamlined reporting without repetition

Board Sign-off Confidence: These protections are crucial for board comfort with UK SRS adoption, particularly for scenario analysis, transition planning, and target-setting disclosures.

Implementation — getting from voluntary to assured

Interactive Implementation Phases

Assessment & Planning

Months 1-3£50K-200K

Key Activities

Gap analysis against UK SRS requirements
Team formation and governance setup
Technology and systems assessment
Timeline and budget planning

Expected Deliverables

Gap analysis report
Implementation plan
Budget approval

Common Risks

Underestimating scope
Insufficient stakeholder buy-in

Overall Implementation Progress0% Complete

0 of 4 phases completed

UK SRS Implementation Cost Calculator

Company Size

Current Reporting Level

Five Readiness Phases

1Gap Analysis3-6 months

Assess current capabilities against UK SRS requirements. Identify data, process, and governance gaps.

Key activities: Current state assessment, Requirements mapping, Gap identification, Resource planning

2Governance Setup2-4 months

Establish cross-functional governance, policies, and procedures for sustainability reporting.

Key activities: Working group formation, Policy development, Role definition, Training delivery

3Data Infrastructure6-12 months

Build data collection, measurement, and management systems for required metrics.

Key activities: Data mapping, System integration, Quality controls, Automation setup

4Voluntary Disclosure12-18 months

Publish voluntary UK SRS-aligned disclosures to build capabilities and stakeholder confidence.

Key activities: Pilot reporting, Stakeholder engagement, Process refinement, Capability building

5Assurance Readiness6-9 months

Prepare for external assurance with robust controls, documentation, and provider selection.

Key activities: Control framework, Provider selection, Assurance planning, Final preparation

Common Implementation Pitfalls

• Starting too late - underestimating 18-24 month implementation timeline
• Data quality issues - inadequate attention to data governance and controls
• Siloed approach - lack of cross-functional coordination
• Technology focus - over-investing in systems before clarifying requirements
• External dependency - relying too heavily on consultants without building internal capability

Assurance and the registered provider regime

Current Position

No mandatory assurance under CP26/5 today

Disclose-whether-assured transparency rule

Voluntary registration regime in development

ISSA (UK) 5000

The FRC's sustainability assurance standard providing framework for UK SRS assurance engagements.

Scope: Sustainability information assurance

Level: Limited or reasonable assurance

All other indirect emissions in value chain

• Supplier emissions

• Business travel

• Employee commuting

• Product lifecycle

UK SRS Scope 3 Transition

Companies can exclude Scope 3 emissions in year one (2027) but must include them from 2028 onwards unless impractical.

Read full Scope 3 guidance →

Scope 3 Emissions Categories Breakdown

Purchased goods & services

35%High

Capital goods

12%Medium

Fuel & energy activities

8%Low

Upstream transportation

15%Medium

Waste generated

3%Low

Business travel

5%Low

Employee commuting

4%Medium

Downstream activities

18%High

Climate Risk Assessment Matrix

Impact

Likelihood

LowMediumHigh

Data center emissions and renewable energy procurement

Each sector faces unique challenges in UK SRS implementation. Financial services must address financed emissions; energy companies focus on use-of-sold-products; real estate tackles leased asset emissions.

Frequently Asked Questions

UK SRS S1: General Requirements — Comprehensive Implementation Guide

Published 25 February 2026 | Effective 1 January 2027 (proposed)

Four Fundamental Principles

Materiality Assessment

Identify sustainability matters that could reasonably be expected to influence economic decisions of users.

• Apply double materiality test (financial and impact)
• Quantitative and qualitative considerations
• Dynamic assessment process

Connected Information

Demonstrate clear connections between sustainability and financial statements.

• Link to business model and strategy
• Cross-reference financial risks and opportunities
• Demonstrate value creation process

Fair Presentation

Neutral, complete and accurate representation without bias toward particular interests.

• Balanced disclosure of positive and negative aspects
• Avoid promotional language or selective reporting
• Include uncertainties and limitations

Comparability & Consistency

Enable comparison across entities and time periods using consistent measurement approaches.

• Follow established methodologies and standards
• Explain any changes in approach
• Provide prior period comparatives

S1 Required Disclosure Structure

UK SRS S2: Climate-Related Disclosures — Implementation Roadmap

Mandatory from 1 January 2027 | Scope 3 transition until 2028

Climate Risk Assessment Framework

Physical Risks

Acute Risks

• Extreme weather events (flooding, storms, heatwaves)
• Supply chain disruptions
• Operational interruptions
• Emergency response costs

Chronic Risks

• Long-term temperature changes
• Sea level rise impacts
• Changing precipitation patterns
• Resource availability shifts

Transition Risks

Policy & Legal

• Carbon pricing mechanisms
• Regulatory compliance costs
• Litigation exposure
• Stranded asset risks

Technology & Market

• Technology substitution
• Market demand shifts
• Reputational impacts
• Cost of capital changes

Climate Scenario Analysis

Mandatory Requirement: All UK SRS entities must conduct climate scenario analysis using at least two scenarios, including a scenario aligned with limiting global warming to 1.5°C.

Scope 3 Emissions: Phased Implementation

Transition Period: Scope 3 emissions disclosure becomes mandatory from 1 January 2028, allowing time for data collection systems development.

Phase 1: 2027-2028

Voluntary Best Practice

• Category Assessment: Identify material Scope 3 categories
• Data Systems: Develop supplier engagement processes
• Methodology: Select calculation approaches (spend-based, average-data, supplier-specific)
• Pilot Projects: Test data collection with key suppliers

Phase 2: 2028+

Mandatory Disclosure

• Full Disclosure: All material categories reported annually
• Data Quality: Gradual improvement from estimates to supplier-specific data
• Verification: External assurance requirements apply
• Target Setting: Science-based targets including Scope 3

Scope 3 Category Prioritisation

Focus initial efforts on the most material categories for your sector:

High-Priority (Start First):

• Purchased goods & services
• Use of sold products
• Downstream transportation

Medium-Priority:

• Capital goods
• Business travel
• Employee commuting

Sector-Specific:

• Financed emissions (financial services)
• End-of-life treatment
• Franchises (retail/hospitality)

Implementation Support & Resources

Official Government Guidance

UK SRS Full Text (DBT)

Complete standards with implementation guidance

FCA Consultation CP26/5

Proposed implementation timeline and requirements

Professional Advisory Network

Big Four Advisory

• Comprehensive implementation programs
• Data systems integration support
• Assurance readiness preparation
• Board training and governance setup

Specialist Consultancies

• Climate scenario modelling
• Scope 3 measurement and management
• Science-based target setting
• Sector-specific implementation

Technology & Data Solutions

Data Collection Platforms

• Automated ESG data aggregation
• Supplier sustainability portals
• Real-time performance monitoring

Carbon Management Systems

• Scope 1, 2, 3 calculation engines
• Emissions factor databases
• Carbon accounting automation

Reporting & Analytics

• UK SRS-aligned reporting templates
• Scenario analysis tools
• Audit trail management

Capability Development

Critical Success Factor: Invest in team capability development early. UK SRS implementation requires significant internal expertise development across finance, sustainability, and operational teams.

Board & Executive Training

• Governance and oversight responsibilities
• Materiality assessment and strategic integration
• Financial impact quantification
• Stakeholder engagement and reporting

Operational Team Development

• Data collection and validation processes
• Carbon accounting and measurement
• Supply chain engagement strategies
• Technology platform management

Sources and further reading

Government & Regulatory Sources

UK SRS Guidance Hub (gov.uk)

Primary government resource for UK Sustainability Reporting Standards

FCA CP26/5: Sustainability Disclosures

FCA consultation on mandatory UK SRS implementation

Government Consultation Response

Details of six UK amendments to IFRS S1 and S2

FRC UK SRS FAQ

Financial Reporting Council guidance on UK SRS implementation

International Standards

IFRS S1: General Requirements

International baseline for general sustainability reporting requirements

IFRS S2: Climate-related Disclosures

International baseline for climate-related financial disclosures

SASB Standards

Industry-specific sustainability accounting standards

Methodology & Framework

GHG Protocol Corporate Standard

Foundation for greenhouse gas emissions measurement and reporting

GHG Protocol Scope 3 Standard

Guidance for value chain emissions measurement

UK SRS S1 and S2 — The Independent Reference Guide

Contents

UK SRS at a Glance

UK SRS S1 and S2 in 60 seconds

Why S1 and S2 came together

Evolution Path

How S1 and S2 are structured (the four pillars)

Governance

Strategy

Risk Management

Metrics & Targets

UK SRS S1 — the General Requirements

Core Concepts

Single Materiality

Connectivity Principle

Time Horizons

Statement of Compliance

UK SRS S2 — Climate-related Disclosures

Climate Application

Physical & Transition Risks

Climate Opportunities

Scenario Analysis

GHG Emissions

How S1 and S2 work together

Final Standards

S2 Mandatory

Scope 3 Transition

S1 Comply-or-Explain

The Climate-First Approach

Start with S2 Only

Gradual S1 Integration

Full Compliance

Statement of Compliance Implications

Example Statement

Future Topic-Specific Standards

The six UK amendments to IFRS S1 and S2

Who must comply, and when

UK SRS Implementation Timeline

UK SRS Standards Published

Voluntary Adoption Period Begins

FCA Final Rules Expected

UK SRS S2 Becomes Mandatory

Scope 3 Carve-out Ends

First UK SRS S2 Reports Due

UK SRS S1 Comply-or-Explain

1. What is your annual revenue?

2. What is your listing status?

3. How many employees do you have?

4. Current sustainability reporting level?

Current Status: Voluntary

FCA-Proposed Scope: ~500 UK Listed Issuers

Phased Implementation Dates

UK SRS S1 and S2 Published

S2 Climate Disclosures Mandatory

Scope 3 Comply-or-Explain

S1 Non-Climate Comply-or-Explain

How UK SRS interacts with existing UK regimes

How UK SRS interacts with international regimes

Multinational Implementation Considerations

The legal protections — s463 and s414CB

Implementation — getting from voluntary to assured

Assessment & Planning

Key Activities

Expected Deliverables

Common Risks

Five Readiness Phases

Common Implementation Pitfalls

Assurance and the registered provider regime

Sector-specific lenses on S1 + S2

Scope 1

Direct Emissions

Scope 2

Indirect Energy

Scope 3

Value Chain

UK SRS Scope 3 Transition

Climate Risks by Category

Key Focus Areas

Implementation Priority

Key Focus Areas