Mandatory by statute
SECR, climate-related financial disclosure, ESOS, the modern slavery statement, gender pay gap reporting and the s.172(1) statement.
Each with its own size test.ESG · the legal status in the UK
Is ESG mandatory in the UK?
No UK law requires an “ESG report”.
Specific environmental, social and governance disclosures are mandatory, each for the organisations its own test reaches: SECR, climate-related financial disclosure, ESOS, the modern slavery statement, gender pay gap reporting and the section 172(1) statement.
Listed companies in five categories must also report against UK SRS or explain why not, for periods from 1 January 2027.
Three statuses
Which parts of ESG are mandatory, and which are not?
Some are required by statute, some are comply or explain, and the rest are voluntary.
“Mandatory”, “comply or explain” and “voluntary” are three different things, and most confusion about ESG comes from blurring them.
A mandatory duty has to be met: the company publishes the statement or breaks the law.
A comply-or-explain rule lets a company say what it has not done and why; the FCA’s PS26/19 puts UK SRS on that basis for five listing categories.
Everything else is voluntary, however often customers ask for it.
Every duty, with its test and its document, is on ESG reporting requirements in the UK.
An ESG disclosure
Comply or explain
UK SRS for UKLR 6, 14, 15, 16 and 22 from 2027, and the UK Corporate Governance Code.
Report, or say what is missing and why.Voluntary
A standalone ESG report, GRI, CDP, ratings questionnaires and UK SRS for everyone else.
Often asked for by customers and lenders.The mandatory duties
What does UK law actually require?
Six duties reach most large companies; each has its own test and its own document.
| Duty | Who it reaches | Where it goes | Instrument |
|---|---|---|---|
| SECR energy and carbon | Quoted companies; unquoted companies and LLPs exceeding two of £36m, £18m and 250 staff | Directors’ report (LLPs: energy and carbon report) | SI 2008/410 Sch 7 |
| Climate-related financial disclosure | Traded companies, banks, insurers, AIM companies and companies over £500m turnover, with more than 500 employees | Strategic report | CA 2006 s.414CA |
| Section 172(1) statement | Companies above the medium-sized test | Strategic report | CA 2006 s.414CZA |
| ESOS energy audit | At least 250 employees, or over £44m turnover and over £38m balance sheet | Notification to the Environment Agency | SI 2014/1643 Sch 1 |
| Modern slavery statement | Commercial organisations with turnover of £36m or more | Website, linked from the homepage | MSA 2015 s.54 |
| Gender pay gap | Employers with 250 or more employees on 5 April | Own website and the government service | SI 2017/172 |
One company
Is ESG mandatory for a private manufacturer?
A private company with 420 staff, £70m turnover and a £30m balance sheet owes five duties, and UK SRS is not one of them.
It is an illustration, not a real organisation.
None of its five duties is called ESG, and none requires a standalone report.
Its customers may still send it an ESG questionnaire; what a supplier must and need not answer is on the ESG questionnaire guide.
Who else is caught, organisation type by organisation type, is on which companies need ESG reporting.
- 1
Is it listed in UKLR 6, 14, 15, 16 or 22?
No. It is a private company, so UK SRS stays voluntary for it (DBT guidance).
- 2
Does SECR reach it?
Yes. With £70m turnover, a £30m balance sheet and 420 staff it exceeds all three of £36m, £18m and 250 (Sch 7 ¶20B).
- 3
Climate-related financial disclosure?
No. A private company is caught only with more than 500 employees and turnover over £500m (s.414CA).
- 4
ESOS?
Yes. It has at least 250 employees (Sch 1).
- 5
Modern slavery and gender pay gap?
Yes to both: turnover is over £36m (SI 2015/1833) and it has 250 or more staff on 5 April (SI 2017/172).
- 6
Section 172(1) statement?
Yes. It exceeds the medium-sized limits of £54m and 250, so it is large for that test (s.414CZA).
Your organisation
Is ESG reporting mandatory for your organisation?
Enter one year’s figures and see which duties they point to.
One year’s figures · eight UK duties
5 of 8 tests point to a duty on these figures.
UK SRS · FCA PS26/19
No UK SRS duty for this category or for an unlisted entity.
The standards remain available for voluntary use.
SECR · Sch 7 ¶20B (unquoted company)
Fewer than two conditions are met, so these figures point to a SECR duty: UK energy, emissions and an intensity ratio in the directors’ report.
Climate disclosure · CA 2006 s.414CA
At or under the 500-employee floor, which applies to every limb, so this duty does not arise.
ESOS · SI 2014/1643 Sch 1
The large-undertaking test is met.
For Phase 4 it is taken on 31 December 2026 across the UK group, with compliance notified by 5 December 2027.
Modern Slavery Act 2015 s.54
Total turnover is not less than £36 million, so a supplier of goods or services publishes a slavery and human trafficking statement each financial year.
Subsidiaries’ turnover counts.
Gender pay gap · SI 2017/172
250 or more employees: a private or voluntary-sector employer publishes six figures within 12 months of the 5 April snapshot date.
The count is taken on that date, not as an average.
Section 172(1) statement · CA 2006 s.414CZA
Larger than medium-sized on these figures, so the strategic report includes a statement of how the directors had regard to s.172(1)(a)–(f), including the environment.
UK Corporate Governance Code 2024
Not applicable: the Code reaches the commercial companies and closed-ended investment funds categories only.
One year, one entity, literal readings.
It does not aggregate groups, apply the two-year rules or the ESOS snapshot date.
Nothing you enter leaves your browser.
A pointer to the instruments, not legal advice: group structures, LLP status and averaging rules change answers.
Enforcement
What makes these duties mandatory in practice?
Each regime has its own enforcer, and only some carry fines.
ESOS is the duty with the clearest fines, set out in Part 8 of its regulations.
SECR and climate disclosure live in the annual report, so they are policed as annual report content: a defective report can be revised by court order, and directors commit an offence if they approve a report they know does not comply.
The full penalty table is on ESG reporting penalties.
Who enforcesExplore
Who enforces
Environment Agency
ESOS: civil penalties up to £50,000 for a missed audit, plus daily penalties.
Who enforces
Financial Reporting Council
SECR and climate disclosure: a defective report can be revised by court order.
Who enforces
Financial Conduct Authority
UK SRS: a listing-rule obligation for five categories; the anti-greenwashing rule for authorised firms.
Who enforces
Equality and Human Rights Commission
Gender pay gap: a failure is an unlawful act.
What is changing
Is ESG becoming mandatory for everyone?
No proposal says so; the live consultation restructures the annual report and changes no law yet.
The government’s Modernising Corporate Reporting consultation closes on 30 November 2026.
It proposes to remove the directors’ report and move SECR to another part of the annual report, not to remove SECR.
It says the government will consider how UK SRS should be reflected in the Companies Act, which is a promise to consider, not a proposal.
Until legislation follows, every duty on this page stands; the detail is on modernising corporate reporting.
ESG is not one legal duty but several, and the work is finding the ones our own figures trigger.
- No instrument
No UK law requires a document called an ESG report
The duties are named statements in named places. - Two of £36m, £18m and 250
SECR reaches an unquoted company that exceeds two of these
Quoted companies are in at any size. - £36m turnover · 250 employees
The modern slavery and gender pay gap duties start here
Turnover counts subsidiaries; headcount is taken on 5 April. - 1 January 2027
UK SRS becomes comply or explain for five listing categories
Voluntary for every other organisation.
Frequently asked
Is ESG mandatory? The questions people ask
Is ESG mandatory in the UK?
Not as one thing.
No UK law requires a document called an ESG report.
Separate duties are mandatory for the organisations each one reaches: SECR energy and carbon reporting, climate-related financial disclosure, ESOS energy audits, the modern slavery statement, gender pay gap reporting and the section 172(1) statement.
Listed companies in five categories must also report against UK SRS or explain why not, for periods beginning on or after 1 January 2027.
Is ESG a legal requirement in the UK?
Specific ESG disclosures are legal requirements; ESG as a label is not.
The duties sit in the Companies Act 2006, SI 2008/410, the ESOS Regulations 2014, the Modern Slavery Act 2015 and SI 2017/172, and for listed companies in the FCA’s UK Listing Rules. Each has its own size or listing test.
Is ESG compulsory for small businesses in the UK?
No statute requires a small or medium-sized company to publish ESG information as such.
SECR exempts an unquoted company that meets two of not more than £36 million turnover, £18 million balance sheet and 250 employees.
The pressure on smaller firms comes from customers, lenders and tenders, not from law.
Is an ESG report mandatory?
No UK instrument requires a standalone ESG or sustainability report.
The mandatory disclosures go into named places: SECR into the directors’ report, climate disclosure and the s.172(1) statement into the strategic report, the slavery statement onto the website, gender pay gap figures onto the government’s service.
A standalone report is voluntary.
Is UK SRS mandatory?
Not as a law for every company.
UK SRS S1 and S2 are voluntary standards.
The FCA’s final rules (PS26/19, 30 September 2026) require companies in UKLR 6, 14, 15, 16 and 22 to report against them or explain why not, for accounting periods beginning on or after 1 January 2027.
For every other entity they stay voluntary.
Will ESG reporting become mandatory for all UK companies?
Nothing proposes that.
The government’s Modernising Corporate Reporting consultation, closing 30 November 2026, proposes to restructure the annual report and asks about a “very large” company category; it says the government will consider how UK SRS should be reflected in the Companies Act. It changes no law until legislation follows.
What happens if a UK company ignores an ESG duty?
It depends on the duty.
ESOS carries civil penalties of up to £50,000 for a missed audit plus daily penalties.
SECR and climate disclosure have no penalty of their own: a defective report can be revised by court order, and approving a non-compliant directors’ or strategic report knowingly or recklessly is an offence for directors.
The slavery statement is enforced by injunction.
Sources
Primary sources
Every figure, date and status on this page traces to the instrument’s owner.
Secondary commentary is never the source for a number.
Checked against 19 sources fromFinancial Conduct AuthorityDepartment for Business and Tradelegislation.gov.ukFinancial Reporting Council
- Financial Conduct AuthorityPS26/19: Aligning listed issuers’ sustainability disclosures with international standards
UK SRS on comply or explain for UKLR 6, 14, 15, 16 and 22, periods from 1 January 2027.
- Financial Conduct AuthorityPS26/19 (PDF)
The final rules, the reliefs and the transitional provisions.
- Department for Business and TradeUK Sustainability Reporting Standards
UK SRS S1 and S2, published 25 February 2026 for voluntary use.
- Department for Business and TradeUK SRS guidance
Who may use the standards and on what basis.
- legislation.gov.ukSI 2008/410, Schedule 7 (SECR)
Energy and carbon in the directors’ report.
- legislation.gov.ukSI 2008/410, Schedule 7 paragraph 20B
The two-of-three exemption for unquoted companies.
- legislation.gov.ukSI 2008/1911, regulation 12B
SECR for large LLPs.
- legislation.gov.ukCompanies Act 2006, section 414CA
Which companies make the climate-related financial disclosures.
- legislation.gov.ukCompanies Act 2006, section 414CB
The non-financial and sustainability information statement and the eight climate disclosures.
- legislation.gov.ukCompanies Act 2006, section 414CZA
The section 172(1) statement.
- legislation.gov.ukCompanies Act 2006, section 465
The medium-sized test that exempts a company from the s.172(1) statement.
- legislation.gov.ukESOS Regulations 2014, Schedule 1
Who is a large undertaking.
- legislation.gov.ukESOS Regulations 2014, Part 8
Civil penalties.
- legislation.gov.ukModern Slavery Act 2015, section 54
The slavery and human trafficking statement.
- legislation.gov.ukSI 2015/1833
The £36 million turnover threshold.
- legislation.gov.ukSI 2017/172
Gender pay gap reporting at 250 employees.
- Financial Conduct AuthoritySustainability Disclosure Requirements (SDR) regime
The anti-greenwashing rule for every authorised firm.
- Financial Reporting CouncilUK Corporate Governance Code
Comply or explain for companies with a commercial companies listing.
- Department for Business and TradeModernising corporate reporting (consultation)
A consultation closing 30 November 2026; it changes no law.
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