The final UK Sustainability Reporting Standards and implications for asset managers

This article builds on our previous briefing on the UK SRS exposure drafts, Delayed but not derailed: the UK Sustainability Reporting Standards consultation.

What are the UK Sustainability Reporting Standards (UK SRS)?

On 25 February 2026, the Department for Business and Trade (DBT) published the final versions of:

• UK SRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information); and
• UK SRS S2 (Climate-related Disclosures). 

The standards represent the UK's endorsed versions of the IFRS’s International Sustainability Standards Board (ISSB) global baseline standards, IFRS S1 and IFRS S2, with minor UK specific amendments. 

UK SRS S1 establishes the overarching framework for sustainability-related financial disclosures, whilst UK SRS S2 establishes detailed requirements for climate-related disclosures, covering governance, strategy, risk management, and metrics and targets (akin to the Task Force on Climate-related Financial Disclosures (TCFD) framework, see below). 

Is the UK SRS mandatory?

Not yet. 

The standards are currently available for voluntary use by any entity that chooses to adopt them. However, the Financial Conduct Authority (FCA) launched a consultation (CP26/5) on 30 January 2026, proposing amendments to the UK Listing Rules that would require certain listed companies to report in accordance with UK SRS beginning for accounting periods on or after 1 January 2027. That consultation remains open until 20 March 2026, with the FCA aiming to publish a policy statement in autumn 2026.

In addition, the government has indicated that it will consider whether to require private companies to report against UK SRS as part of a broader consultation on modernising the UK corporate reporting framework, known as the Modernising Corporate Reporting programme. 

How does the UK SRS relate to the existing TCFD-aligned disclosure regime?

UK SRS S2 integrates and supersedes the TCFD recommendations, using the same four pillar structure (governance, strategy, risk management, metrics and targets), but with significantly more granular disclosure requirements.

The task force which created the TCFD framework was formally disbanded in October 2023, with the ISSB standards marking what the Financial Stability Board described as the "culmination of the work of the TCFD". 

What are the key implications for the asset management industry?

The UK SRS will have a number of implications for asset managers, both directly and indirectly:

• listed asset managers that fall within the scope of the FCA's proposed listing rule changes will need to prepare for mandatory UK SRS reporting;
• with respect to any shareholdings asset managers have in in-scope listed entities, those portfolio companies may require data from their value chain which could include finance providers. Additionally, asset managers may benefit from improved, standardised sustainability data flowing from in-scope portfolio companies, which can be used in the manager's own investment analysis and engagement activities, particularly in the context of any applicable ESG disclosure rules;
• the government has signalled that it may extend mandatory reporting to large private companies through changes to the Companies Act 2006 and this would have significant implications for private capital managers, both in terms of (i) required scoping exercises to establish the list of in-scope portfolio companies and (ii) the data and reporting of those portfolio companies will need to be undertaken; and
• perhaps most importantly, the FCA has indicated that it will consider updating the disclosure requirements for asset managers under its existing rules in line with the UK SRS standards and the Transition Plan Taskforce’s (TPT) Disclosure Framework. This suggests that the UK SRS may in due course be woven into the FCA's broader sustainability regulatory architecture for UK fund managers.

What specific provisions are relevant to asset managers regarding financed emissions?

The final UK SRS S2 incorporates the ISSB's targeted amendments to IFRS S2, published in December 2025, which clarify that an entity is permitted to limit its measurement and disclosure of Scope 3 Category 15 GHG emissions to "financed emissions" — being those emissions attributed to loans and investments made by the entity to investee companies or counterparties.

The amendment clarifies that companies may exclude GHG emissions attributable to derivatives from their reported Scope 3 financed emissions. 

A new mechanism has been included in the final UK SRS to allow financial institutions to disclose financed emissions for a different reporting period to that used for the related financial statements. Where a financial institution determines it is impracticable to reliably estimate financed emissions for the same reporting period, it must disclose the reasons for this, the measurement approach, inputs and assumptions used and its plan to be able to report financed emissions for the same reporting period, including timelines. This provision recognises the practical challenges that asset managers and other financial institutions face in obtaining timely emissions data from portfolio companies.

Furthermore, the requirement to use the Global Industry Classification Standard (GICS) to disaggregate financed emissions has been removed and entities may now use any internationally recognised industry classification system. This change increases flexibility and could reduce reporting costs.

How does the UK SRS interact with the FCA's Sustainability Disclosure Requirements (SDR)? 

The FCA's SDR regime, which introduced sustainability disclosure and investment labelling rules for UK asset managers, operates entirely separately from the UK SRS framework. SDR focuses on fund-level disclosures and anti-greenwashing measures for fund managers, whilst UK SRS is a corporate level reporting framework. 

However, given the FCA’s indication to extend mandatory UK SRS reporting, asset managers should be prepared for UK SRS reporting in future.

What are the key differences between the draft consultation version and the final UK SRS?

The final UK SRS contains several changes from the exposure drafts published in June 2025. 

The key differences are as follows.

• Removal of time references for transitional reliefs. The government has removed specific time references within UK SRS. When mandatory disclosures are introduced, it is expected that time periods for relying on reliefs will be set out in the relevant regulations.
• Removal of the effective date. The effective date provisions have been removed from both UK SRS S1 and S2. The effective date will be set out in regulations when reporting obligations are introduced on a mandatory basis.
• Clarification of compliance statements when using reliefs. Entities providing a compliance statement can state compliance with UK SRS S2 even if relying on exemptions, but are required to specify that they are using the exemptions.
• Removal of the delayed reporting transition relief. The exposure draft included a transition relief that would have allowed entities to publish sustainability related disclosures at a later date than their financial statements. This has been removed in the final version to ensure alignment and connectivity with financial reporting.
• Financed emissions provisions. As noted above, a new mechanism has been included to allow financial institutions to disclose financed emissions for a different reporting period, subject to additional disclosures. This was not in the original exposure draft and was introduced in response to stakeholder feedback on the challenges of obtaining timely emissions data.
• Change from "shall" to "may" regarding industry based metrics. The requirement to consider the applicability of and reference industry based metrics (including SASB standards) has been softened from "shall" to "may".
• Incorporation of ISSB amendments to IFRS S2. The final UK SRS S2 incorporates the targeted amendments that the ISSB published in December 2025, including the clarifications regarding Category 15 GHG emissions, the use of alternative classification systems and jurisdictional reliefs. 

What is the global context for UK SRS?

By endorsing the ISSB standards, the UK joins a growing cohort of over 30 jurisdictions that are adopting ISSB aligned sustainability reporting standards, including Australia, Japan, Hong Kong, Canada and Singapore. This global alignment strengthens comparability across jurisdictions and reduces the risk of regulatory fragmentation.

Conclusion

The publication of the final UK SRS marks a significant milestone in the UK's sustainability reporting landscape. For most asset managers, there is no current regulation that mandates UK SRS disclosure, however, the FCA have indicated their intentions and the volume and granularity of data required under UK SRS represents a step change from the existing TCFD aligned framework, so it would be wise to begin to build the necessary systems and governance structures with future reporting in mind.