Unveiled: UK's Sustainability and Climate Reporting Guidelines Proposal
The UK government has unveiled the exposure drafts of new UK Sustainability Reporting Standards (UK SRS), marking a significant step towards enhancing transparency and competition in the sustainability assurance sector. The new standards, based on the sustainability and climate-related standards developed by the IFRS Foundation's International Sustainability Standards Board (ISSB), are part of a series of sustainability disclosure-related consultations launched by the UK government.
The consultations are intended to kickstart economic growth, as part of the UK government's Plan for Change. The new UK SRS, which aim to be transparent, clear, and proportionate for investors in the UK, remove a relief from the IFRS standard that allows companies to publish sustainability-related disclosures at a later date than their financial statements in the first year of reporting. This means that reporting entities must publish sustainability disclosures concurrently with their financial statements starting from their first year of reporting.
The key amendments proposed in the new UK SRS, based on recommendations from the UK Sustainability Disclosure Technical Advisory Committee (TAC), include the removal of the first year transition relief, elimination of the GIC classification requirement, and various technical wording clarifications and effective date adjustments. These changes are aimed at ensuring smoother implementation and stakeholder clarity.
The government has accepted four amendments from the TAC and two from the Policy and Implementation Committee (PIC), mainly focused on technical and wording issues to better align with UK requirements. The final versions of the UK SRS incorporating these TAC recommendations are expected to be published in autumn 2025, following public consultation periods.
In addition to the new UK SRS, the government is launching consultations on transition plans for large companies and financial institutions, aiming to mandate transition plans that align with the 1.5°C goal of the Paris Agreement. The consultations seek evidence of the costs and benefits of using the new UK SRS to inform decisions on reporting requirements for companies. All consultations will remain open to responses until September 17, 2025.
The government is also considering introducing mandatory sustainability reporting requirements for some companies, based on the new standards. Furthermore, a consultation regarding the development of a voluntary registration regime for the providers of assurance for sustainability reporting is underway.
The new UK SRS, along with the accompanying consultations, are part of the UK government's efforts to promote competition in the sustainability assurance sector, as it strives to lead the way in global sustainability reporting standards. The government has provided a link to access the new draft UK Sustainability Reporting Standards (UK SRS) for public review and feedback.
[1] UK Government (2023). UK Sustainability Reporting Standards: Exposure Drafts. [Online]. Available: https://www.gov.uk/government/publications/uk-sustainability-reporting-standards-exposure-drafts [2] UK Government (2023). Consultation on Transition Plans and Voluntary Registration Regime. [Online]. Available: https://www.gov.uk/government/consultations/consultation-on-transition-plans-and-voluntary-registration-regime [3] UK Government (2023). Consultation on Mandatory Sustainability Reporting Requirements. [Online]. Available: https://www.gov.uk/government/consultations/consultation-on-mandatory-sustainability-reporting-requirements [4] UK Government (2023). Technical Amendments to UK Sustainability Reporting Standards. [Online]. Available: https://www.gov.uk/government/publications/technical-amendments-to-uk-sustainability-reporting-standards
- The new UK Sustainability Reporting Standards (UK SRS) are based on the sustainability and climate-related standards developed by the IFRS Foundation's International Sustainability Standards Board (ISSB), demonstrating the UK government's commitment to science and environmental-science in addressing climate-change.
- Businesses in the UK will be required to publish sustainability disclosures concurrently with their financial statements starting from their first year of reporting, as a result of the amendments proposed in the new UK SRS, which is expected to impact the finance sector.
- The UK government's plans for mandatory sustainability reporting requirements, transition plans for large companies and financial institutions, and the development of a voluntary registration regime for providers of assurance for sustainability reporting, are all aimed at enhancing sustainability standards in business and finance, and promoting transparency in the environmental-science domain.
