UK closes consultation on UK SRS, mandatory reporting from January 2026

The UK Department for Business and Trade closed its consultation on the UK Sustainability Reporting Standards, with final standards based on IFRS S1 and S2 expected in Autumn 2025 and mandatory reporting from periods beginning no earlier than January 1, 2026. Indian multinationals with UK listings or large UK operations should track the regime, which removes IFRS S1 transition relief and mandates concurrent financial and sustainability reporting.

The UK Department for Business and Trade closed its consultation on exposure drafts of the UK Sustainability Reporting Standards (UK SRS), based on the ISSB's IFRS S1 and S2. Final standards are expected in Autumn 2025, available first for voluntary use, with mandatory reporting for economically significant entities for accounting periods beginning no earlier than January 1, 2026. The UK introduced six amendments, including removing the IFRS S1 transition relief that allowed delayed publication, so sustainability disclosures must now appear alongside financial statements.

Mandatory reporting applies to economically significant entities, including listed companies, large private firms, and LLPs. These entities benefit from extended transition reliefs: the climate-first phased reporting period was extended to two years, allowing focus solely on climate disclosures (UK SRS S2) before broader sustainability disclosures (UK SRS S1) in year three, while Scope 3 relief begins from year two. The mandatory GICS classification for financed emissions was removed, and the obligation to use SASB Standards softened from 'shall refer to' to 'may consider.'

Affected entities should prepare for mandatory application to accounting periods beginning no earlier than January 1, 2026, and use the voluntary adoption window following Autumn 2025 endorsement to build capability. Firms should plan for concurrent publication of sustainability and financial statements given the removal of IFRS S1 transition relief, while leveraging the two-year climate-first phasing and year-two Scope 3 relief. Companies should also evaluate alternative classification standards now permitted in place of mandatory GICS and SASB references.

Key figure — Mandatory reporting threshold: accounting periods beginning no earlier than January 1, 2026