UK SRS board oversight: the governance pillar and the board’s duties

UK SRS S2 paragraph 6 requires a company to identify the governance body or individual responsible for oversight of climate-related risks and opportunities, and to explain how that responsibility is written into terms of reference and role descriptions, how the body ensures it has the right skills, how and how often it is informed, how it takes climate into account in strategy, major transactions and risk management (including trade-offs), and how it oversees targets, including whether related metrics are in remuneration policies. It also asks about management’s role and the controls that support oversight. UK SRS S1 paragraph 27 asks the same for every material sustainability topic.

No particular structure is required. The governance body can be a board, a committee or an equivalent body charged with governance, or the oversight can sit with an individual. What the standard requires is that the company identifies which, and backs the choice with terms of reference, mandates or role descriptions.

The listed company, and in practice its board. An explanation under UKLR 6.6.6R(7A) or (7B) is a statement in the annual financial report. Where it sits in the strategic report, section 414D of the Companies Act 2006 requires the board to approve that report, and DTR 4.1.12R requires responsibility statements from the persons responsible within the issuer. The FCA says it will monitor and enforce its UK SRS rules together with the FRC.

Section 172(1) requires a director to promote the success of the company for the benefit of its members as a whole, having regard to matters including the likely consequences of decisions in the long term and the impact of the company’s operations on the community and the environment. Section 414CZA requires companies other than medium-sized ones to describe in the strategic report how directors have had regard to those matters. UK SRS governance disclosures show how the board oversees climate specifically; section 172 is the duty behind it.

No. The FRC’s 2024 Code deliberately contains no sustainability reporting requirement, because the listing rules and the Companies Act already require climate-related disclosures. Its hook is Provision 29: a board declaration on the effectiveness of material controls, which the FRC says extends to narrative and ESG reporting controls, for financial years beginning on or after 1 January 2026.

UK SRS S2 paragraph 29(g) requires a description of whether and how climate-related considerations are factored into executive remuneration, and the percentage of executive management remuneration recognised in the period that is linked to them. It is a transparency requirement: a company that links no pay to climate says so, but it must address the question.

The wording is parallel. UK SRS S1 paragraphs 26 and 27 apply to sustainability-related risks and opportunities generally; UK SRS S2 paragraphs 5 and 6 apply the same questions to climate. Where oversight of sustainability is managed on an integrated basis, UK SRS S2 paragraph 7 allows one integrated governance disclosure rather than a separate one for each topic.

Before the first reporting period starts. The FCA’s rules apply to accounting periods beginning on or after 1 January 2027, and the governance disclosure describes how oversight worked during the period, so for a December year-end the mandate, the briefing cadence and the decision papers need to exist from 1 January 2027.