The UK government announced today the release of exposure drafts of new UK Sustainability Reporting Standards (UK SRS), based on the sustainability and climate-related standards developed by the IFRS Foundation’s International Sustainability Standards Board (ISSB), aimed at forming the basis of a framework to deliver sustainability-related financial information to the financial markets.
The new standards were released by the government as part of a series of sustainability disclosure-related consultations launched by the government, which also included consultations on climate-related transition plan requirements, and on assurance of sustainability reporting.
The release of the draft standards comes as the UK government is considering whether to introduce mandatory sustainability reporting requirements for some companies, which would be based on the new standards. As part of the consultation, the government said that it is seeking evidence of the costs and benefits of using the new UK SRS, which would inform its decisions on reporting requirements for companies.
The new publications include drafts of “UK SRS S1” and “UK SRS S2,” which correspond to the IFRS Foundation’s ISSB’s (ISSB) S1 (sustainability-related) and S2 (climate-related) standards. While aligning closely with the IFRS standards, the new UK standards propose several amendments, based on recommendations made last year by the UK Sustainability Disclosure Technical Advisory Committee (TAC).
Among the key amendments proposed in the new standards is an extension of a “climate-first” relief to give companies extra time to provide disclosure on some sustainability-related risks, in order to enable them to first focus on climate-related reporting, with the UK SRS aiming for two years of relief, compared to one year in the IFRS standard. The UK SRS also removes a relief from the IFRS standard that allows companies to publish sustainability-related disclosures at a later date than their financial statements in the first year of reporting, with the UK publication stating that the relief “compromises the principle of ‘connectivity’ with the financial statements and other narrative reporting.”
The government aims to release finalized standards later this year.
UK Minister for Competition and Markets Justin Madders said:
“We want to work with businesses to develop a “common sense” sustainable reporting framework that is transparent, clear and proportionate for those investing in the UK.
“These measures will enhance competition in the sustainability assurance sector, helping to deliver on our Plan for Change and kickstart economic growth.”
In addition to the sustainability reporting standards consultation, the government is also launching consultations on transition plans, noting that it is “committed to mandating” large companies and financial institutions such as banks, asset managers and pension funds “to develop and implement credible transition plans that align with the 1.5°C goal of the Paris Agreement.”
Additionally, the government launched a consultation regarding the development of a voluntary registration regime for the providers of assurance of sustainability reporting.
Each of the consultations will remain open to responses until September 17, 2025.
Click here to access the new draft UK SRS.
