UK SRS S1 — Who It Applies To and When

Companies in Scope

UK SRS S1 applies to the same population as S2 — approximately 515 primary-listed companies under FCA regulation. This includes commercial companies (UKLR6), non-equity shares and non-voting equity shares (UKLR16), and transition category issuers (UKLR22). The scope may be extended to private companies through future Companies Act amendments, but this is not yet confirmed.

The Two-Year Transitional Relief

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 UK SRS S2 becomes mandatory. This two-year gap is deliberate. It recognises that while most listed companies have some experience with climate disclosure through TCFD, fewer have mature reporting programmes for broader sustainability topics such as biodiversity, water, workforce, and supply chain.

During the transitional period (2027–2028), companies are required to comply with UK SRS S2 (climate disclosures) but are not required to comply with or explain their position on S1. From 1 January 2029, companies must either comply with S1 or provide specific explanations for each area of non-compliance.

What Comply-or-Explain Means in Practice

Comply-or-explain is not optional reporting. It requires companies to either meet every applicable disclosure requirement in S1 or provide specific, requirement-by-requirement explanations for areas of non-compliance. A general statement that the company has decided not to apply S1 is insufficient. The FCA expects companies to engage substantively with each disclosure requirement and provide a meaningful explanation where they cannot comply.

In practice, this means companies choosing the explain path will still need to understand S1 in detail. They will need to assess each requirement, determine whether compliance is feasible, and — where it is not — articulate why. The explanations will be subject to regulatory scrutiny and investor challenge.

What Companies Should Do Now

The 2029 deadline may appear distant, but the data collection and governance structures required for S1 compliance take time to build. Companies in scope should begin identifying the sustainability topics likely to be material to their business (using the S1 materiality definition), assessing the availability and quality of data for each topic, establishing governance structures for broader sustainability oversight, and evaluating whether their current reporting systems can accommodate non-climate sustainability disclosures.