Corporate reporting – government consultations on sustainability reporting and disclosure of climate transition plans

The government has launched three consultations on:

• new UK Sustainability Reporting Standards – UK SRS 1 and UK SRS 2 – which are based on the standards published by the International Sustainability Standards Board (ISSB);

• introducing mandatory disclosure of climate transition plans by companies; and

• the development of a voluntary registration regime for the providers of assurance of sustainability reporting.

In June 2023 the ISSB issued final versions of two new sustainability reporting standards – IFRS S1, which sets out some general requirements for sustainability-related disclosures, and IFRS S2, which includes specific climate-related disclosure requirements which are similar, but not identical, to those covered by the Taskforce on Climate-related Financial Disclosures (TCFD) Recommendations (to read more about implementation of the TCFD Recommendations in the UK, see our corporate governance fundamental on climate-related reporting by UK listed companies here). IFRS S1 and IFRS S2 are voluntary international standards and will only have legal effect if implemented into domestic law. The IFRS Foundation has also published guidance on preparing transition plans in accordance with IFRS S2, building on the work of the UK’s Transition Plan Taskforce.

The UK SRS as set out in the consultation track very closely the content of IFRS S1 and IFRS S2, with only a few minor amendments proposed following recommendations from the UK Sustainability Disclosure Technical Advisory Committee and the UK Sustainability Disclosure Policy and Implementation Committee. The proposed amendments are mostly technical in nature but do include a longer transitional period than IFRS S1, with reporting on wider sustainability-related risks and opportunities beyond climate being required only from year 3 onwards (you can read more about the proposed amendments in our ESG team’s blog here).

The consultation closes on 17 September 2025, following which the UK SRS will be finalised and endorsed.

Once the UK SRS have been finalised, the FCA is expected to consult during autumn 2025 on changing the UK Listing Rules to replace its existing TCFD-aligned reporting requirement for listed companies with a requirement to report against the UK SRS, including publishing transition plans. The government has said it will also consult on whether to mandate UK SRS disclosures through the Companies Act 2006.