The UK government has released draft sustainability and climate-related disclosure standards, marking a significant step towards creating a unified sustainability reporting framework for the financial markets.
According to ESG Today, the proposed UK Sustainability Reporting Standards (UK SRS), based on the International Sustainability Standards Board (ISSB) guidelines developed by the IFRS Foundation, are designed to enhance transparency and comparability of environmental data across businesses.
Published alongside two additional consultations—one on corporate transition plans and another on assurance of sustainability reports—the draft standards reflect the government’s wider push for environmental accountability. As part of the consultation process, the government is now seeking feedback on the costs and benefits of using the UK SRS before deciding whether to implement mandatory reporting for some companies.
The new draft standards include “UK SRS S1” and “UK SRS S2,” closely mirroring the ISSB’s S1 and S2 standards but with several UK-specific amendments. One of the most notable proposals is a two-year “climate-first” relief, which grants companies extra time to report on broader sustainability issues, allowing them to prioritise climate-related disclosures. This doubles the one-year relief offered by the IFRS version.
Another major change removes an IFRS-granted grace period that permitted companies to publish their sustainability disclosures separately from financial statements during the first year. UK regulators argue this change better aligns with the principle of integrated financial and non-financial reporting.
UK Minister for Competition and Markets Justin Madders said, “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. These measures will enhance competition in the sustainability assurance sector, helping to deliver on our Plan for Change and kickstart economic growth.”
In tandem with the UK SRS consultation, the government reaffirmed its intent to mandate large companies and financial institutions to create credible transition plans aligned with the Paris Agreement’s 1.5°C target. It also proposed a voluntary registration scheme for assurance providers of sustainability reporting.
All three consultations—on the UK SRS, transition plans, and assurance—will remain open for feedback until 17 September 2025. Finalised standards are expected to be released later this year.
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