IFRS-Aligned UK Standards Released: The UK’s draft Sustainability Reporting Standards (UK SRS) closely follow the ISSB’s IFRS S1 and S2, with key UK-specific modifications.
Extended Climate-First Relief Proposed: Businesses may receive a two-year grace period to focus first on climate disclosures—double the ISSB’s one-year provision.
Mandatory Reporting Under Review: Government seeks input on the cost-benefit of UK SRS adoption, informing potential future mandates for corporate disclosure.
The UK government has released exposure drafts of its new UK Sustainability Reporting Standards (UK SRS), marking a significant step toward a modernised corporate reporting framework. The drafts are modeled on the International Sustainability Standards Board’s (ISSB) IFRS S1 and S2, covering general sustainability disclosures and climate-related reporting, respectively.
As part of the Mansion House reforms, these standards are intended to provide “credible and decision-useful sustainability-related financial information to the financial markets,” reinforcing the UK’s ambition to be a global leader in sustainable finance.
Among the six proposed amendments for UK application, the most notable include:
A two-year “climate-first” relief, allowing companies to initially focus on climate disclosures before broader sustainability risks—an extension of the ISSB’s one-year relief.
The removal of delayed publication allowances granted under IFRS S1, in order to maintain strong connectivity between sustainability disclosures and financial statements.
The UK government is currently assessing whether to mandate sustainability reporting for certain companies and is calling for evidence on the costs and benefits of the UK SRS to inform this decision.
RELATED ARTICLE: UK Accounting Watchdog Recommends ISSB Standards for Sustainability Reporting
“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,” said Justin Madders, UK Minister for Competition and Markets.
“These measures will enhance competition in the sustainability assurance sector, helping to deliver on our Plan for Change and kickstart economic growth.”
The draft UK SRS are released alongside two related consultations:
Transition Plan Disclosure: The government reiterates its commitment to mandate large companies and financial institutions to publish credible transition plans aligned with the Paris Agreement’s 1.5°C target.
Sustainability Assurance Oversight: Proposals include a voluntary registration regime for assurance providers, intended to strengthen market trust.
All consultations remain open for feedback until September 17, 2025. The finalized UK SRS are expected later this year.
Read the UK Sustainability Reporting Standards here.
Follow ESG News on LinkedIn
