UK Sustainability Reporting Standards: Quick guide

The United Kingdom (UK) has published its new Sustainability Reporting Standards (UK SRS), a finance-focused framework that aligns with the International Sustainability Standards Board (ISSB) standards and will reshape how organisations disclose sustainability and climate-related matters.

Pending FCA consultation, it is unclear which organisations will be required to report first. However, preparing early is a strategic advantage, allowing you to have data collation and governance of matters ready for reporting. Our quick guide breaks down everything you need to know about the UK SRS, including the benefits of starting early, the challenges that come with the reporting, and how Ramboll can help you along the way.

The United Kingdom (UK) has published its new Sustainability Reporting Standards (UK SRS) aimed at establishing a credible and internationally aligned framework for companies to disclose material sustainability and climate-related risks. The standards provide the UK's approach to assessing and endorsing sustainability disclosure requirements. These requirements are based on the International Financial Reporting Standards (IFRS) developed by the International Sustainability Standards Board (ISSB) and serve as a baseline for corporate reporting.

The UK SRS is comprised of two parts.

UK SRS S1

The UK SRS S1, provides the foundation for sustainability-related financial disclosures and sets the baseline objectives. The scope of UK SRS S1 requires organisations to disclose information about sustainability-related risks and opportunities expected to affect cash flows, access to finance, and cost of capital. The information is useful to primary users of general financial reports and raises the bar on rigour, governance, and evidence. It effectively brings finance, risk, sustainability and internal control functions into a shared accountability model that looks much more like financial reporting than traditional standalone sustainability communications.

UK SRS S2

The UK SRS S2 complements UK SRS S1 in bringing a greater focus, specifically on climate-related disclosures. This focus on climate-related risks and opportunities follows the same recommendations as the Task Force on Climate-related Financial Disclosures (TCFD), and is structured around four thematic areas: governance, strategy, risk management, and metrics and targets.

The UK SRS S2 requires organisations to disclose where climate-related risks and opportunities are concentrated across the business model and value chain, including geographic areas, facilities, and asset types. Organisations must also disclose how they have responded or plan to respond, through strategy and decision-making. This includes mitigation and adaptation efforts and, where organisations have one, a climate-related transition plan with key assumptions and dependencies outlined. The UK SRS S2 also contains detailed expectations for quantitative climate information addressing disclosure of Scope 1, 2 and 3 greenhouse gas emissions.

Voluntary adoption is strongly encouraged, with mandatory requirements soon to follow.

Mandatory requirements are currently undergoing consultation with the Financial Conduct Authority (FCA), but it is expected that large and listed businesses will be mandated to disclose starting January 2027. For those organisations first impacted by the UK SRS, reporting will likely be required on a comply or explain basis.

The UK SRS provides a tangible opportunity to enhance resilience across an organisation. Proactively planning for disclosure will enable a head start in assessing sustainability and climate-related impacts, risks, and opportunities. The key benefits to be gained by early engagement in preparation for disclosure include improved access to capital, enhanced supply chain resilience and expanding profit margins.

Improved access to capital. Equipping lenders and investors with decision-useful insights into how sustainability and climate-related risks and opportunities affect cash flows, resilience, and strategy supports the confidence needed to provide capital. By building robust governance, controls, and data, including transition planning and emissions metrics, companies can provide clearer, more comparable disclosures that reduce information gaps and perceived risk. This, in turn, can help secure financing on more competitive terms and broaden eligibility for capital with ISSB-aligned requirements.

Enhanced supply chain resilience. Proactively mapping material risks and dependencies across value chains and improving the quality of supplier data, particularly for Scope 3 emissions and other sustainability metrics, helps to secure critical operational inputs. Procurement teams that are supported to identify critical suppliers and hotspots can enhance supply chain resilience by building reporting requirements into contracts and working with suppliers on data, performance, and continuity plans. This improved visibility reduces the risk of disruption and supports earlier intervention, as well as better diversification and contingency planning.

Expanding profit margins. The UK SRS is also an opportunity to uncover operational efficiencies. Developing the data architecture required to report can become a strategic tool to better integrate sustainability metrics into core planning and procurement. Analysis required for reporting often highlights energy, resource and waste-reduction opportunities, and helps prioritise capital expenditures (CAPEX) with clearer paybacks, while improved supplier transparency can reduce volatility, disruption, and quality issues that drive hidden costs. Over time, stronger risk management and more credible disclosures can also support lower risk premia across insurance, financing and contracting, reinforcing margin improvement.

The benefits outlined above reveal a further thematic shift to be capitalised upon. Stakeholder expectations have shifted. Consumers expect organisations to engage with sustainability and now look for evidence of this in purchasing decisions. Sustainability issues regularly impact the credibility of businesses with associated reputational risks and the social license to operate. The FCA has also been explicit about why this matters to markets. Investors need clear, consistent and financial material information to support pricing and market integrity.

The FCA acknowledges that reporting in line with the UK SRS will be new for many listed companies, which is reflected in the proposal to treat the standards on an initial “comply or explain” basis. The complex nature of the standards sets an expectation that reporting compliance will be technically and organisationally demanding.

Scenario analysis will be required and can be resource intensive. The UK SRS consider that complexity will vary depending on exposure and available capabilities. Scope 3 emissions remain a consistent point of friction, and the UK SRS S2 expects organisations to consider the full value chain and the full set of Scope 3 categories. Reporting organisations will need to engage their suppliers to enable suitable data coverage.

Nature is also expected to feature as a potential material item for disclosure at many organisations in scope. Though the UK SRS does not have a dedicated nature standard, if nature-related dependencies and impacts create sustainability-related financial risks and opportunities that affect an organisation's prospects, the UK SRS S1 requires disclosing that decision-useful information.

In response to these challenges, Ramboll has developed services to support organisations in preparation for disclosure. These services cover both technical analysis and reporting mechanics, including readiness assessments, climate risk and resilience assessments, and strategic implementation guidance.

For more information on how Ramboll helps organisations translate climate disclosure requirements into practical strategies, stronger decision-making, and measurable progress click here Navigating global climate disclosure requirements