Sustainability reporting · UK
Sustainability reporting in the UK: what it is, what binds, where it goes
Sustainability reporting in the UK is not one report: it is a set of duties with different populations, from SECR in the directors’ report to UK SRS in a listed company’s annual financial report.
Under the FCA’s final rules, listed companies in five categories report against UK SRS on a comply-or-explain basis for periods from 1 January 2027.
This page explains the frameworks, works out which ones reach your company and shows where each disclosure goes.
Definition
What sustainability reporting is, depending on who is asking
Sustainability reporting is the disclosure, usually in or alongside the annual report, of a company’s emissions, energy use, climate and nature risks, and the plans and targets it has for them.
What goes in depends on the question the framework asks.
The UK standard asks the investor’s question: UK SRS S1 ¶1 requires information about sustainability-related risks and opportunities that is useful to primary users of general purpose financial reports — existing and potential investors, lenders and other creditors.
That is financial materiality, and UK SRS S1 sets no numeric thresholds for it: materiality is judged, and reassessed at each reporting date.
The EU’s ESRS ask two questions at once — how sustainability affects the company and how the company affects people and the environment — which is double materiality.
The GRI Standards start from a company’s most significant impacts, and no UK instrument requires them.
The international baseline is the ISSB’s, explained on the ISSB framework; UK SRS is the UK’s version of it.
Law, rule or request
Mandatory, comply-or-explain, or asked for
| Framework | Status | Who |
|---|---|---|
| SECR | Law | Quoted companies; large unquoted companies and LLPs |
| Climate-related financial disclosure | Law | Companies Act categories with more than 500 employees |
| ESOS scheme | Law | Large undertakings and their UK groups |
| UK SRS S1 and S2 | Listing rule: comply or explain from 2027 | UKLR 6, 14, 15, 16 and 22 |
| UK SRS S1 and S2 | Voluntary | Every other UK entity |
| UK ETS | Law | Covered installations, aircraft operators and ships |
| Packaging EPR | Law | Packaging producers above the size tests |
| Plastic Packaging Tax | Tax | Manufacturers and importers of 10 tonnes or more |
| Carbon Reduction Plan | Condition of bidding | Suppliers to in-scope central government contracts |
| TNFD | Voluntary | Any company |
| SBTi targets | Voluntary | Any company |
GOV.UK’s UK SRS guidance says the standards are available for voluntary use by any entity that chooses to do so.
The listing-rule obligation is narrower than “mandatory”: a listed company in scope discloses against UK SRS or says what it has not disclosed, why, and what it plans to do.
The Companies Act climate duty is implemented through SI 2022/31, which amended ss.414CA and 414CB, and it continues alongside the FCA’s rules.
The FCA’s rules replace its TCFD-aligned listing rule for periods from 1 January 2027; TCFD explains the four pillars both share, and the FCA’s reporting requirements page sets out the firms’ side.
Which regimes apply to us?
Your reporting stack, and where each part goes
The builder applies each regime’s own test to the figures you enter and says where the disclosure sits: annual financial report, strategic report, directors’ report, a notification, or a published plan.
The tests differ, which is the point of running them separately.
SECR’s unquoted test is two of more than 250 employees, more than £36m turnover and more than £18m balance sheet, in paragraph 20B of Schedule 7.
Those figures did not move when the Companies Act size thresholds rose in April 2025, because SECR carries its own.
ESOS asks for 250 or more employees, or turnover above £44m and balance sheet above £38m together, on 31 December 2026; SI 2026/701 amended the scheme for Phase 4.
The Companies Act climate duty needs more than 500 employees on every route, plus a listing, banking or insurance status, or turnover above £500m.
A UK listed company typically owes SECR as a quoted company, the climate duty, ESOS if its group is large, and UK SRS on comply or explain.
A large private company owes SECR and ESOS, and the climate duty only above 500 employees and £500m; UK SRS is voluntary for it, and the modernising corporate reporting consultation proposes no threshold for private companies.
An SME supplier usually owes nothing by law, and answers requests instead: a Carbon Reduction Plan, a customer’s ESG questionnaire, or an EU customer’s CSRD request, which the VSME cap limits.
The framework-by-framework detail is on ESG reporting requirements in the UK.
Your reporting stack · and where each part goes
Where: Wherever you choose; usually the annual report
Only the five listing categories report under the FCA’s rules; for everyone else the standards are voluntary.
Where: Directors’ report
You meet at least two of more than 250 employees, more than £36m turnover and more than £18m balance sheet; UK energy, emissions, an intensity ratio and efficiency action.
Where: —
The duty needs more than 500 employees on every route.
Where: A notification to the Environment Agency by 5 December 2027 — not a published report
At least 250 employees, or turnover above £44m and balance sheet above £38m, tested on 31 December 2026 across the UK group.
Sources: FCA PS26/19 ¶¶3.6–3.7; SI 2008/410 Sch 7 Part 7A; CA 2006 s.414CA; SI 2014/1643 as amended; PPN 006; Directive (EU) 2026/470.
The Companies Act duties apply to UK-registered companies and LLPs.
Simplified: SECR’s low-energy statement, group and subsidiary exemptions, the year-on-year size rules and the EU tests are in each regime’s own page.
Nothing you enter is stored or sent.
Four common company types
What applies, what to do, and by when
| Company | Applies | What to do | By when |
|---|---|---|---|
| UK listed company (UKLR 6) | SECR as a quoted company; the Companies Act climate duty above 500 employees; ESOS if the group is large; UK SRS on comply or explain | Map existing climate disclosures against UK SRS S2, decide whether to use the Scope 3 and S1 reliefs, and plan the four statements in UKLR 6.6.6R | Periods from 1 January 2027; first report within four months of the 2027 year end; ESOS by 5 December 2027 |
| Large private company | SECR if two of the three limbs are exceeded; ESOS on its own test; the climate duty only above 500 employees and £500m turnover; UK SRS voluntary | Run the SECR and ESOS tests separately — they differ, and SECR’s did not rise with the 2025 size uplift | Every directors’ report; ESOS notification by 5 December 2027 |
| SME supplier | Usually no UK duty of its own; requests arrive instead | Measure Scope 1 and 2 once with the right year’s DESNZ factors, and answer every request from the same figures | When a tender or questionnaire arrives; a Carbon Reduction Plan at the point of bidding |
| Group with EU operations | CSRD through an EU subsidiary or listing above the Omnibus thresholds, or Article 40a; UK duties apply alongside | Work out which entity reports under which regime, and build one emissions dataset for both | CSRD from financial year 2027 under Omnibus I; CSDDD from 26 July 2029 |
The overlap is the opportunity: SECR’s energy and emissions data is the starting inventory for UK SRS S2, and an ESOS assessment’s savings opportunities are the raw material for a transition plan.
Governance can be aligned too: one board committee, one set of controls over the data, and one owner for each figure, whichever report it appears in.
What does not carry across is scope: SECR for an unquoted company is UK-only, while UK SRS and CSRD reports cover the group, so the boundary has to be set once and stated in each report.
Sustainability reporting frameworks
Every framework a UK company meets, on one map
| Framework | What it is | Binds? |
|---|---|---|
| UK SRS S1 | General requirements: governance, strategy, risk management, metrics and targets for sustainability-related risks | Comply or explain for listed categories from 2027 |
| UK SRS S2 | Climate-related disclosures, including Scope 1, 2 and 3 emissions | Comply or explain for listed categories from 2027 |
| SECR reporting | Energy use, emissions, an intensity ratio and efficiency action in the directors’ report | Law since 1 April 2019 |
| ESOS | A four-yearly energy assessment, notified to the Environment Agency | Law; Phase 4 by 5 December 2027 |
| Transition plans | A plan for the transition; listed companies say whether they have one | No duty to have one |
| DESNZ conversion factors | The emission factors behind most UK reports; the 2026 set was published on 11 June 2026 | A tool, not a regime |
| SBTi | Voluntary targets; the Corporate Net-Zero Standard V2.0, published 11 June 2026, applies to validations from 1 February 2027 | Voluntary |
| CSRD (EU) | EU sustainability reporting after Omnibus I: more than 1,000 employees and €450m | EU law; reaches UK groups indirectly |
| CSDDD | EU due diligence duty, applying from 26 July 2029 | EU law |
| VSME | Voluntary EU standard for smaller companies, Delegated Regulation (EU) 2026/1560 | Voluntary; caps value-chain requests |
CSRD after the Omnibus reaches UK groups through EU subsidiaries, EU listings and Article 40a, as CSRD reporting for UK companies sets out.
A group reporting under both systems should start from CSRD vs UK SRS and build one emissions dataset for both.
The carbon-pricing and packaging regimes are law for those they cover but are not disclosures: the UK ETS, packaging EPR and Plastic Packaging Tax each have their own returns.
Where UK SRS goes
Inside the annual financial report, with four statements
For a listed company in scope, the disclosures belong in the annual financial report under UKLR 6.6.6R.
The rule asks for a compliance statement against UK SRS S2 and UK SRS S1, and where a company has not disclosed, an explanation of what is missing, why, and the steps it plans.
It adds three statements: where the disclosures can be found, whether assurance was obtained and on what basis, and — for UKLR 6, 16 and 22 companies — whether the company has a climate-related transition plan and where it is.
The list of UK SRS S1 paragraphs to apply sits in guidance, UKLR 6.6.6A G, not in the rule.
The annual financial report must be public within four months of the end of the financial year, which fixes the reporting calendar.
iXBRL tagging applies to IFRS consolidated financial statements; PS26/19 sets no tagging requirement for sustainability disclosures.
SECR sits in the directors’ report and the Companies Act climate disclosures in the strategic report, so a listed company’s annual report carries all three in different places.
The requirement-by-requirement reading is on UK SRS compliance, and the dates on the UK SRS S1 and S2 timeline.
How a report is built
Six steps from data to a compliance statement
| Step | What it involves | Anchor |
|---|---|---|
| 1. Scope | Which regimes apply, to which entity, from which period | The builder above; each regime’s own test |
| 2. Materiality | Which sustainability-related risks and opportunities could reasonably affect prospects | UK SRS S1 ¶¶B19, B25, B28 |
| 3. Inventory | Scope 1 and 2, then Scope 3, on a consistent boundary | GHG Protocol Corporate Standard; DESNZ factors |
| 4. Governance | Board oversight, management roles, controls over the data | UK SRS S1 governance; the UK Corporate Governance Code |
| 5. Disclosure | Draft against S1 and S2, or record what is omitted and why | UKLR 6.6.6R(7A), (7B) |
| 6. Assurance and sign-off | Decide whether to commission assurance and state it either way | UKLR 6.6.6R(8); ISSA (UK) 5000 if commissioned |
The inventory is the heaviest step for most companies, and SECR data is the natural start: it already covers energy and Scope 1 and 2, using the method in the government’s environmental reporting guidelines.
Scope 3 is where UK SRS goes beyond SECR, and a listed company has one year of relief from disclosing it under the FCA’s rules.
Governance sits with the board, and the FRC’s UK Corporate Governance Code is the frame most listed companies already report against.
Assurance is optional: the FRC’s ISSA (UK) 5000 governs the engagement if one is commissioned, and sustainability assurance covers who may provide it.
Software helps with the data, and the two layers are tested differently: carbon accounting software builds the inventory, and carbon reporting software produces the disclosure.
A gap check against all six steps is on the UK SRS readiness assessment.
No regulator publishes a preparation timetable; any lead time you see quoted is an adviser’s estimate.
SECR
The regime most companies already report under, and it is bigger than forecast
SECR has applied since 1 April 2019 to every quoted company and to large unquoted companies and LLPs, after the government’s 2018 consultation.
DESNZ’s independent evaluation of January 2026 counts about 19,900 companies and LLPs in scope, against 11,300 forecast — about 76% more.
The 2026 post-implementation review restates those figures and recommends retaining SECR with amendments, not replacing it.
Quoted companies report global Scope 1 and 2 emissions and energy; unquoted companies and LLPs report UK energy and emissions, with a narrow transport-fuel Scope 3 limb.
Every SECR report carries at least one intensity ratio and a narrative on energy efficiency action; SECR covers the rules in full.
ESOS
An assessment, not a report
ESOS asks a large undertaking to measure its total energy use, audit the significant part and identify savings, then notify the Environment Agency.
Phase 4 runs from 6 December 2023 to 5 December 2027, with qualification tested on 31 December 2026, as the Environment Agency’s Phase 4 guidance explains.
The ESOS results do not have to be published, though they feed a transition plan and the energy narrative in SECR.
The step-by-step route is on the ESOS Phase 4 compliance guide.
UK SRS and the ISSB
Close to IFRS S1 and S2, not identical
UK SRS S1 and S2 were published by the Department for Business and Trade on 25 February 2026, as the UK’s versions of the ISSB’s IFRS S1 and S2.
The government removed the effective dates so that timing could be set by others — which the FCA has now done for listed companies.
In the standards, the climate-first relief and the Scope 3 relief carry no time limit, and most references to the industry-based guidance say “may” rather than “shall”.
The one stricter addition is UK SRS S2 ¶B59A, on financed emissions.
The FCA’s rules then give listed companies one year of Scope 3 relief and two years for non-climate UK SRS S1 matters, from first application.
Compliance with UK SRS is therefore not automatically compliance with the ISSB standards; the FRC’s sustainability reporting FAQs cover the UK frame.
How the rules developed, from CP26/5 to PS26/19, is tracked on the CP26/5 tracker; CP26/5 itself is here as a PDF.
Support
Where to go next, by what you need
Professional bodies publish technical guidance; ICAEW wrote on how listed companies’ sustainability disclosures were set to evolve in February 2026, before the final rules.
For hands-on delivery, specialist sustainability consultants build the figures and disclosures.
For the standards in depth, sustainabilityreportingstandards.co.uk is our editorial reference; srs.green maps the environmental regimes, and srsreport.com covers the report as a document.
Or start at the UK SRS home page, or book a free 15-minute call with our network of specialists.
Test yourself
Seven claims about sustainability reporting, true or false
Most errors in circulation come from pages written before the final rules: “mandatory UK SRS from 2027”, “515 companies must comply”, “assurance required”.
Each answer names the provision that settles it.
UK sustainability reporting is not a single mandatory standard: it is overlapping duties with different populations, and UK SRS reaches listed companies through comply-or-explain listing rules.
Sustainability reporting: true or false?
UK SRS is mandatory for UK listed companies from 2027.
UK SRS S1 and S2 are word for word IFRS S1 and S2.
SECR’s thresholds rose with the April 2025 Companies Act size uplift.
More companies are in SECR scope than the government predicted.
Every UK company must publish a Carbon Reduction Plan.
The FCA requires UK SRS disclosures to be iXBRL-tagged.
UK SRS S1 sets percentage thresholds for materiality.
0 of 7 answered.
Nothing you choose is stored or sent.
Frequently asked
Sustainability reporting, answered
What is sustainability reporting?
A company’s public account of its emissions, energy use, climate and other sustainability risks, and its plans and targets for them, usually in or alongside the annual report.
UK SRS asks how sustainability matters affect the company’s prospects, for investors and lenders; the EU’s ESRS also ask how the company affects people and the environment; GRI starts from the company’s most significant impacts.
Is sustainability reporting mandatory in the UK?
Parts of it are.
SECR is law for quoted companies, large unquoted companies and large LLPs; the Companies Act climate-related financial disclosure duty is law for companies with more than 500 employees in its categories; ESOS is law for large undertakings.
UK SRS is voluntary for any entity, and under the FCA’s final rules listed companies in five categories report against it on a comply-or-explain basis from 2027.
Is UK SRS mandatory for listed companies?
No. PS26/19 requires listed companies in UKLR 6, 14, 15, 16 and 22 to report against UK SRS on a comply-or-explain basis for accounting periods beginning on or after 1 January 2027, with first reporting in 2028.
A company that does not disclose says what is missing, why, and the steps it plans.
Where does a UK SRS report go?
In the annual financial report, under UKLR 6.6.6R.
The rule also requires a statement of where the disclosures are, a statement about any assurance obtained, and, for UKLR 6, 16 and 22 companies, a statement of whether the company has a climate-related transition plan and where to find it.
How many companies report under SECR?
About 19,900 companies and LLPs, according to DESNZ’s independent evaluation of January 2026, against 11,300 forecast when SECR was introduced.
The 2026 post-implementation review restates the figure and recommends keeping SECR with amendments.
What is UK SRS reporting guidance?
The standards themselves, published by the Department for Business and Trade with GOV.UK guidance on their use, and the FCA’s listing rules and draft Technical Note TN 803.1 on how to comply or explain.
The FCA’s draft guidance was open for comment until 28 October 2026.
Are UK SRS S1 and S2 the same as IFRS S1 and S2?
Not word for word.
The UK versions remove the effective dates, leave the climate-first and Scope 3 reliefs without a time limit in the standards, mostly turn “shall” into “may” for the industry-based guidance, and add a stricter paragraph on financed emissions, UK SRS S2 ¶B59A.
The FCA’s rules then set one-year and two-year reliefs for listed companies.
Does a sustainability report need assurance?
Not under the FCA’s rules.
A listed company states whether it obtained assurance and, if so, from whom, over what and to which standards.
The FRC’s ISSA (UK) 5000 governs an engagement if one is commissioned; it requires no one to obtain assurance.
Do small companies have to do sustainability reporting?
Usually not by law.
What reaches them are requests: a Carbon Reduction Plan to bid for central government contracts above £5m a year, customer questionnaires, and data requests from EU customers, which the VSME value-chain cap limits for suppliers with 1,000 employees or fewer.
Does the EU CSRD apply to UK companies?
Not as UK law.
It reaches UK groups through EU subsidiaries or EU listings above 1,000 employees and €450m net turnover, and through Article 40a for a non-EU parent with EU turnover above €450m in each of the last two years and an EU subsidiary or branch above €200m.
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.
- FCAPS26/19: Aligning listed issuers’ sustainability disclosures with international standards
Comply or explain across UK SRS for UKLR 6, 14, 15, 16 and 22; six categories excluded (¶3.7).
- FCAPS26/19 (PDF), including the made rule text
UKLR 6.6.6R(7A), (7B) and (8); the reliefs at UKLR TP 16.
- DBTUK SRS S1 and UK SRS S2
Published 25 February 2026; available for voluntary use by any entity.
- DBTUK SRS S1 (PDF)
Objective (¶1); materiality (¶¶B19, B25, B28).
- FCA HandbookDTR 4.1 — the annual financial report
Public within four months of year end (DTR 4.1.3R).
- legislation.gov.ukSI 2008/410 Schedule 7 Part 7A — SECR
Quoted companies and large unquoted companies; the size test at para 20B.
- DESNZIndependent evaluation of SECR (29 January 2026)
About 19,900 companies and LLPs in scope, against 11,300 forecast.
- DESNZ2026 post-implementation review of the SECR Regulations
Recommends retaining SECR with amendments.
- legislation.gov.ukCompanies Act 2006, s.414CA
Who owes climate-related financial disclosures in the strategic report.
- Environment AgencyComply with ESOS Phase 4
Qualification on 31 December 2026; compliance by 5 December 2027.
- Cabinet OfficePPN 006: Carbon Reduction Plans
A condition of participation for in-scope contracts above £5m a year; policy, not law.
- EUR-LexAccounting Directive, consolidated to 18 March 2026
CSRD scope after Omnibus I: 1,000 employees and €450m; Article 40a.
- IFRS FoundationInternational Sustainability Standards Board
IFRS S1 and S2, the baseline UK SRS adopts.
- GHG ProtocolCorporate Standard
The inventory method UK SRS S2 and SECR reporting rest on.