UK, new standards for sustainability reporting, ESG disclosure obligations coming soon

The UK government has published preliminary drafts of the new UK Sustainability Reporting Standards (UK SRS), developed from the IFRS Foundation ’s International Sustainability Standards Board (ISSB) sustainability and climate standards . These standards will form the basis of a new regulatory framework to provide sustainability-related financial information to financial markets.

The drafts are part of a broader package of public consultations that also includes proposals on climate transition plans and external verification ( assurance ) of sustainability information.

The UK government is also considering introducing reporting requirements for some companies, based on these new standards. To this end, it has asked, again through the consultation now open, to provide evidence on the costs and benefits of adopting the standards , to guide future decisions.

The published drafts include two main standards: UK SRS S1, which covers reporting on environmental, social and governance (ESG) topics in a broad sense, and UK SRS S2, which focuses on information relating to climate change.

While maintaining strong alignment with the ISSB standards (S1 and S2), the UK version proposes some specific changes, suggested by the UK TAC technical committee in 2023. Among the most notable differences are:

• An extended “climate-first” approach : companies will have two years to focus on climate reporting as a priority, temporarily postponing reporting on other sustainability topics. In contrast, the ISSB standard provides for only one year of “tolerance”.
• Strengthening the principle of consistency : Unlike the international standard, the United Kingdom does not provide that companies can publish sustainability information later than the financial statement. The motivation? Maintain the principle of integration and consistency between different company information.

According to a statement, the government aims to publish the final version of the standards by the end of 2025. “We want to work with businesses to build a common-sense sustainability reporting system that is clear, transparent and proportionate for those investing in the UK,” Justin Madders, Minister for Competition and Markets, said. “These measures will help to strengthen competition in the verification of sustainability information, supporting our strategy for change and stimulating economic growth.”

In parallel, the government has launched a consultation to make it mandatory for large companies and financial institutions, such as banks, pension funds and asset managers, to adopt climate transition plans in line with the objective of limiting global warming to 1.5°C, as set out in the Paris Agreement.

The development of a voluntary registration system for assurance providers, i.e. those who provide independent verification of ESG information, has also been proposed.

All consultations will remain open until 17 September 2025.