UK SRS Standards
UK SRS S2 — Climate-Related Financial Disclosures
Comprehensive climate disclosure requirements for listed companies using the proven TCFD four-pillar framework, with enhanced disclosure requirements and proposed mandatory application from January 2027.
Overview
UK SRS S2 establishes comprehensive climate-related disclosure requirements following the proven TCFD four-pillar framework. Published by the Department for Business and Trade on 25 February 2026, it is currently available for voluntary adoption with proposed mandatory application for approximately 500 primary-listed companies from financial years beginning 1 January 2027.
UK SRS S2 incorporates targeted amendments to IFRS S2, including financed emissions clarifications, removal of mandatory GICS classification, and jurisdictional reliefs around GHG Protocol compliance.1
The Four-Pillar Framework
UK SRS S2 retains the TCFD four-pillar disclosure architecture but with substantially enhanced requirements:
Governance Pillar
Board and management oversight of climate-related risks and opportunities, including governance processes, skills and competencies, and integration into executive remuneration where climate performance metrics are used.
Strategy Pillar
Climate risks and opportunities affecting business model and strategy across short, medium, and long-term horizons, including mandatory scenario analysis where the entity has the skills, capabilities, and resources.
Risk Management Pillar
Processes for identifying, assessing, prioritising, and monitoring climate risks and opportunities, and integration with overall enterprise risk management framework.
Metrics and Targets Pillar
Scope 1 and 2 emissions from day one using GHG Protocol Corporate Standard.Scope 3 emissions on comply-or-explain basis until 1 January 2028. Climate-related metrics, targets, and progress reporting.
Climate Scenario Analysis
UK SRS S2 requires scenario analysis to assess the resilience of strategy and business model to climate risks. Entities must consider at least two scenarios, one consistent with a 1.5°C pathway.
Where entities have the skills, capabilities, and resources, quantitative analysis is required. Where not feasible, qualitative analysis is permitted with explanation of why quantification was not possible.
Acceptable scenario frameworks include NGFS scenarios, IEA World Energy Outlook, and IPCC pathways.2
Greenhouse Gas Emissions
Scope 1 and 2: Mandatory from day one using GHG Protocol Corporate Standard. Both absolute emissions and intensity metrics required.
Scope 3: Compliance moves to mandatory basis for financial years beginning 1 January 2028. All 15 GHG Protocol categories must be assessed for materiality when Scope 3 disclosed.
One-year transitional relief reflects data infrastructure development needs across UK listed companies, recognising the complexity of value chain emissions measurement.
Financial Statement Integration
UK SRS S2 requires explicit connectivity between climate disclosures and financial statements, demonstrating how climate risks affect:
- Carrying amounts of assets and liabilities
- Recognition and measurement of provisions
- Impairment assessments
- Assumptions underlying forward-looking estimates
This connectivity requirement represents a structural enhancement beyond TCFD requirements, ensuring sustainability disclosures are integrated with core financial reporting.
Legal Framework and Liability
UK SRS S2 is confirmed as a national reporting framework under section 414CB(6) of the Companies Act 2006.
Companies reporting under UK SRS S2 do not need to duplicate disclosures elsewhere to meet section 414CB(2A) obligations, provided UK SRS S2 usage is clearly referenced in the relevant statement.
Disclosures within the Strategic Report benefit from section 463 liability protections — directors liable to the company only on knowing or reckless basis, with no liability to third parties for forward-looking sustainability statements.3
Implementation Guidance
Listed companies preparing for proposed 2027 implementation should prioritise:
- Board governance: Establish sustainability oversight committee and update terms of reference
- Data systems: Assess readiness for Scope 1, 2, and 3 emissions measurement
- Scenario analysis: Build capability for climate scenario assessment and financial quantification
- Professional support: Engage advisory services for complex technical areas
Scope 3 Emissions Disclosure Framework
Strategic approach to Scope 3 emissions measurement and disclosure requirements under UK SRS S2, with prioritisation framework for the 15 categories.
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