Two things happened to UK sustainability reporting in the first quarter of 2026, and the combination has left a lot of finance teams unsure what they are actually obliged to do. The short version: the new standards exist, they are voluntary, and the mandatory regime is still the old one.

What was published

On 25 February 2026 the Department for Business and Trade published UK SRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and UK SRS S2 (Climate-related Disclosures). These are the UK’s endorsement of the ISSB’s IFRS S1 and IFRS S2.

They followed a consultation on exposure drafts that ran from 25 June to 17 September 2025 and drew 209 responses, alongside a parallel consultation on an oversight regime for assurance of sustainability disclosures.

The UK made some deviations from the ISSB baseline. References to SASB Standards are optional rather than mandatory. The specific time limits on transitional reliefs, climate-only reporting in the first year, deferral of Scope 3, have been removed from the standards themselves, leaving regulators to set them when they mandate the standards. The GHG Protocol methodology relief remains time-limited. The standards also incorporate the ISSB’s December 2025 amendments, including the exclusion of certain Scope 3 categories.

Government has confirmed that UK SRS S2 constitutes a national reporting framework for the purposes of section 414CB(6) of the Companies Act 2006, so a company reporting under UK SRS S2 should not need to duplicate disclosures for existing climate-related financial disclosure obligations, provided S2 is clearly referenced and the other Companies Act requirements are met. Including the disclosures in the Strategic Report also brings them within the section 463 safe harbour, which is a genuine benefit and not a technicality.

What is actually mandatory today

Nothing has been switched off. The current regime continues unchanged:

  • The Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022 for large companies and LLPs
  • FCA listing rules requiring TCFD-aligned disclosures for listed issuers
  • FCA rules for asset managers, life insurers and FCA-regulated pension providers
  • SECR, Streamlined Energy and Carbon Reporting

So if you were reporting under TCFD in 2025, you are still reporting under TCFD in 2026. UK SRS is something you may adopt, not something you must.

What changes, and when

The FCA consulted in CP26/5, Aligning listed issuers’ sustainability disclosures with international standards, which opened on 30 January 2026 and closed on 20 March 2026. It proposes replacing the TCFD-aligned listing rules with UK SRS reporting across the listing categories.

The expected sequence is a policy statement in autumn 2026, with rules taking effect from 1 January 2027 and applying to accounting periods beginning on or after that date.

The proposed calibration is that UK SRS S2 core climate disclosures become mandatory, with Scope 3 and the wider S1 disclosures on a comply-or-explain basis and some transitional deferral. The precise length of those deferrals is not settled until the policy statement lands, and we would treat any specific figure circulating now as provisional.

Separately, the Government’s Modernising Corporate Reporting programme, announced in October 2025, will consider extending requirements to private entities under the Companies Act, with consultation expected later in 2026. Private company finance directors who have been watching this from the sidelines should note that.

The CSRD position has changed materially

If your last assessment of CSRD was made in 2024 or 2025, redo it. The Omnibus I Directive was signed off by the Council on 24 February 2026 and has substantially narrowed scope.

For EU companies, the threshold is now more than 1,000 employees and above €450 million net annual turnover.

For third-country undertakings, which is the category most UK groups fell into, the test is now a non-EU parent with EU net turnover above €450 million and an EU subsidiary or branch with turnover above €200 million. Those figures were previously €150 million and €40 million. The practical effect is that the large majority of UK groups previously in scope are now out of it.

Wave one companies that began reporting for FY2024 are out of scope for 2025 and 2026. Entities meeting the revised thresholds report from FY2027, with first reports in 2028. Member states have roughly a year from entry into force to transpose.

What we would actually do about it

If you are a listed issuer: assume UK SRS from 1 January 2027 and start now on the gap between your current TCFD disclosures and S2. The material work is rarely the narrative. It is the data: Scope 3 categories, the governance evidence trail, and the ability to produce numbers that would survive assurance.

If you were in CSRD scope: re-run the threshold test before spending another pound on readiness. A number of UK groups are still resourcing programmes for a requirement that no longer applies to them.

If you are a large private company: the direction of travel is clear even if the timetable is not. Voluntary adoption of UK SRS S2, or even partial adoption, is defensible preparation and gets your data infrastructure built before it is compulsory.

Whoever you are: the disclosures will eventually need to withstand assurance. Data that cannot be traced to a source, a control and an owner will not survive that. Getting the plumbing right is unglamorous and it is the whole job.

If you want a view on where you sit against S1 and S2, or whether Omnibus has taken you out of CSRD scope, that is a conversation worth having before the autumn policy statement rather than after it.