Navigate the UK's Sustainability Reporting Transformation
The UK's new sustainability reporting standards (UK SRS) are mandatory from 2026. Claritas ESG provides instant, AI-powered answers to navigate IFRS S1 & S2 alignment, tackle data challenges, and build your compliance roadmap.
of companies currently fail to comply with existing SECR requirements
Mandatory UK SRS implementation (no earlier than Jan 1)
Minor modifications from IFRS S1 & S2 standards
IFRS S1: General Sustainability Disclosure
Requires disclosure of material sustainability-related risks and opportunities that could affect your company's financial performance, position, or cash flows.
- Identification of material sustainability matters
- Financial impact assessments
- Cross-reference to financial statements
IFRS S2: Climate-Related Disclosure
Follows the established TCFD framework with specific focus on climate-related risks, opportunities, and GHG emissions.
- Mandatory Scope 1, 2, and relevant Scope 3 emissions
- Climate scenario analysis
- Transition planning disclosures
Built on TCFD's Proven Four-Pillar Framework
Governance
Board oversight and management role in assessing and managing climate risks
Strategy
Climate risks and opportunities impact on business, strategy, and financial planning
Risk Management
Processes for identifying, assessing, and managing climate-related risks
Metrics & Targets
Metrics and targets used to assess and manage climate risks and opportunities
Why You Must Act Now: The Regulatory Framework
29% of companies already fail basic SECR requirements. Enhanced enforcement powers and escalating penalties make early preparation essential.
ARGA: The New Enforcement Reality
Replacing FRC with unprecedented director accountability powers
Financial Penalties
Direct fines on company directors
Director Prohibitions
Bans from serving as directors
Public Censure
Reputational sanctions and naming
FCA Enforcement Escalation
Anti-greenwashing rules with massive fine increases
UK SRS Fundamentals & Requirements
UK Sustainability Reporting Standards will be based directly on IFRS S1 and S2, with only six minor modifications for UK-specific requirements.
Implementation Timeline
Q4 2025
Voluntary Use
Final standards available for early adoption
Jan 2026+
Mandatory
No earlier than accounting periods starting Jan 1, 2026
2-Year
Transition
Climate-first reporting relief period
Phased
Rollout
Premium listed first, then other significant companies
UK-Specific Modifications to IFRS Standards
- Extended “climate-first” transition relief from one to two years
- Removal of delayed publication relief - sustainability disclosures must be published simultaneously with financial statements
- Flexibility on industry classification using either SIC or NAICS
- Encouragement (not requirement) to use SASB metrics in the UK context
International Alignment & Cross-Border Considerations
UK SRS joins 30+ jurisdictions implementing ISSB standards while maintaining strategic domestic adaptations.
Global Convergence
UK SRS joins 30+ jurisdictions implementing ISSB standards as a global baseline, creating international comparability for investors and multinational companies.
Benefits of Alignment
- • Reduced compliance costs for multinationals
- • Enhanced investor comparability
- • Leveraged global expertise and guidance
- • Simplified assurance processes
UK Adaptations
- • Extended transition periods
- • Simultaneous publication requirements
- • Industry classification flexibility
- • Voluntary SASB metrics
Current Compliance Landscape & Industry Challenges
Significant gaps in current sustainability reporting highlight the urgent need for preparation as more rigorous standards approach.
Current Compliance Gaps
SECR (Streamlined Energy and Carbon Reporting) Failures:
- • 29% of qualifying companies fail basic requirements
- • 7% don't state total energy consumption
- • 70% don't specify emission calculation methodologies
Global CSRD Survey Findings (PwC 2024):
- • 59% of companies face data quality issues
- • Only 20% have validated data availability
- • Scope 3 emissions collection particularly challenging
Your UK SRS Implementation Guide
Immediate action is essential given current compliance gaps and the comprehensive scope of upcoming UK SRS obligations.
Immediate Actions
- Conduct materiality assessments
- Upgrade data management systems
- Begin developing transition plans
- Assess current SECR compliance gaps
Strategic Preparation
- Leverage two-year climate-first transition period
- Implement scalable technology platforms
- Consider voluntary adoption from Q4 2025
- Establish board oversight mechanisms
Long-term Success
- Embrace as strategic opportunity
- Build competitive advantage through transparency
- Position for sustainable finance benefits
- Integrate with core business strategy
Key Success Factors
Technology & Data
- • Move beyond basic spreadsheets
- • Implement “collect once, report multiple ways” systems
- • Ensure robust data validation processes
Governance & Culture
- • Establish clear board oversight
- • Integrate ESG into executive compensation
- • Build cross-functional reporting teams