Publishing but not being able to support it with evidence is exactly why the UK government’s latest signal on UK Sustainability Reporting Standards (UK SRS) matters. CFOs must prepare now for what is expected to transform corporate sustainability reporting with the introduction of UK SRS. In 2026, these new UK Sustainability Reporting Standards will modernize corporate sustainability disclosure and replace the current Streamlined Energy and Carbon Reporting (SECR) framework.
The government plans to release the final versions of UK SRS S1 and UK SRS S2 in early 2026, taking effect from accounting periods starting on or after January 1, 2026. They build on the International Sustainability Standards Board’s (ISSB) first two standards, IFRS S1 and IFRS S2, which were released on June 26, 2023. The Financial Conduct Authority (FCA) plans to discuss adopting these standards for listed companies in January 2026.
Financial leaders need to understand the timeline, compliance requirements, and strategic implications of these UK sustainability reporting standards from grasping the fundamentals to implementing them effectively.
The UK Sustainability Reporting Standards (UK SRS) uses international frameworks to create a reliable foundation for corporate sustainability disclosure in the United Kingdom. Three critical elements shape this foundation: the international standards it’s based on, the UK’s endorsement process, and its unique features compared to other global reporting frameworks.
The International Sustainability Standards Board (ISSB) came into existence at COP26 in Glasgow in 2021. This board received the mandate to create a global baseline for sustainability reporting. The ISSB, a standard-setting board of the International Financial Reporting Standards (IFRS) Foundation, released its first two standards in June 2023:
These standards help companies report sustainability matters in a “robust, comparable, and verifiable manner.” IFRS S2 builds upon the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. The TCFD was formally disbanded in October 2023 and became part of the ISSB.
The UK government set up two key committees to make adoption easier:
December 2024 saw the TAC’s final report that recommended endorsing IFRS S1 and S2 with minor changes. The government’s consultation on exposure drafts of UK SRS S1 and S2 reflected these recommendations from June to September 2025. Companies can voluntarily adopt these standards after endorsement.
The UK SRS is substantially different from the European Union’s Corporate Sustainability Reporting Directive (CSRD) in several key ways:
The UK SRS aligns with international standards instead of regional approaches, creating a globally consistent framework while keeping distinct UK regulatory features.
The UK’s sustainability reporting landscape enters a critical implementation phase after extensive consultation ended September 17, 2025. CFOs must prepare for key deadlines, transition periods, and compliance expectations outlined in the final roadmap.
The final UK SRS will reach publication in early 2026. The FCA plans to consult on adopting these standards for listed before the final UK SRS publication. During this phased period until standards reach completion financial leaders are given a tight implementation window to prepare in advance.
The UK SRS mandatory status will likely phase out the Streamlined Energy and Carbon Reporting (SECR) framework which still remains the primary framework that requires companies to disclose energy use and greenhouse gas emissions. Companies already using SECR or TCFD frameworks will adapt more easily to the transition because they understand sustainability reporting principles.
The draft UK SRS offers several transitional provisions to reduce implementation challenges:
The Financial Conduct Authority will expand its rules to mandate UK SRS compliance for listed companies. The government might introduce mandatory reporting for economically significant entities through Companies Act 2006 legislation. These decisions will weigh the costs and benefits of reporting while supporting the government’s goal to cut regulatory costs for businesses by 25%.
UK SRS has introduced new strategic imperatives for finance leaders, and the Chief Financial Officer’s role is evolving faster beyond traditional financial oversight. Companies are already experiencing negative climate change effects, with 97% reporting impacts. This situation requires CFOs to take center stage in implementing sustainability strategies.
Business performance and shareholder value now depend on sustainability as a core component rather than a side consideration. Finance leaders can spot both risks and opportunities that affect long-term resilience by arranging financial and sustainability objectives together. Their role includes setting ambitious yet achievable targets with proper funding and developing carbon budgets along with regular financial plans. CFOs should transform their existing financial structures to drive sustainability across organizations. This shifts the finance function from just reporting to becoming a strategic force behind ESG performance.
Companies just need to actively integrate ESG into their business strategy as investor and stakeholder expectations grow stronger. UK’s Audit, Reporting and Governance Authority will likely receive powers to register and monitor sustainability assurance providers, according to the government’s consultation on assurance.
That means that finance leaders should get ready for heightened scrutiny by:
Finance departments now include new positions like sustainable-finance manager, ESG-reporting manager, and finance-for-sustainability director. CFOs want their teams to build their capabilities fast in ESG and sustainability expertise, especially in reporting, scenario planning, and forecasting. This translates into participating in training programs and upskilling plans that finance staff can also attend. It is a given that the core team must work closely with operations, procurement, and human resources to include ESG considerations in decision-making processes.
UK SRS creates strategic opportunities and it’s not all about being compliant. CFOs can establish ESG as a key indicator of long-term business value by applying financial disciplines to sustainability metrics. These standards help companies strengthen their climate strategy, improve transparency, and reduce risks of “green hushing” or greenwashing accusations. Companies can potentially reduce capital costs through detailed sustainability reporting as investors get better tools to evaluate risks and rewards. Organizations that lead in this area can capture related opportunities through the “purpose premium” and gain competitive advantages.
The UK’s direction of travel is now, as the UK SRS is about to become the common language of sustainability reporting, and mandatory adoption will be engineered through regulators and rulemaking, not left to goodwill.
CFOs need to understand the international foundations of UK SRS to prepare well for these changes but they don’t really have much time to adjust their reporting processes. Early preparation and building capabilities is the powerful combination to direct better this change.
For CFOs and sustainability leads, the opportunity is mainly about control. The organizations that do best will treat this like any other reporting transformation: define ownership, harden data and methodologies, build a repeatable close process, and rehearse before the deadlines bite.
Success with UK SRS needs careful planning, teamwork across departments, and investment in people and systems.
So, when stakeholders start asking not only what is disclosed but also how they know it’s true, the differentiator won’t be the elegance of the narrative. It will be the ability to answer that there is a consistent evident trail.
