UK SRS · The climate standard
UK SRS S2: the climate standard, and how it differs from IFRS S2
UK SRS S2 is the UK’s climate-related disclosure standard, issued by the Secretary of State for Business and Trade on 25 February 2026 as the UK version of IFRS S2.
On 30 September 2026 the FCA’s final rules, PS26/19, put it on a comply-or-explain basis for listed companies, not the mandatory basis the consultation had proposed.
This page is the overview: what the standard asks, how it departs from the ISSB text, and where the work concentrates.
The standard
What UK SRS S2 is, in one table
The standard’s objective, at ¶1, is to make a company disclose climate-related information that is useful to the primary users of general purpose financial reports.
Its reach is set at ¶2: risks and opportunities that could reasonably be expected to affect the entity’s cash flows, access to finance or cost of capital over the short, medium or long term.
That is a financial test, and ¶4 puts anything that could not affect the entity’s prospects outside the standard.
The copyright notice on the standard itself says the UK standards were not prepared or endorsed by the International Sustainability Standards Board.
UK SRS S2 cannot be read alone, because ¶C2 requires it to be applied at the same time as UK SRS S1 so far as S1 relates to climate.
The pair is explained for newcomers on what is UK SRS, and both standards’ disclosure sets are laid out on UK SRS requirements.
A clause-by-clause reading of UK SRS S2 is also kept on our sister reference.
| Question | Answer |
|---|---|
| Full title | UK SRS S2 Climate-related Disclosures |
| Issued by | The Secretary of State for Business and Trade |
| Date | 25 February 2026 |
| Based on | IFRS S2, as amended by the ISSB in December 2025 |
| Structure | ¶¶1–37 and Appendices A–C, all of equal authority |
| Covers | Physical risks, transition risks and climate-related opportunities (¶3) |
| Applied with | UK SRS S1, at the same time (¶C2) |
| Effective date | None in the standard; set by UK law or FCA rules (¶C6) |
Status after PS26/19
Mandatory, voluntary or comply or explain?
The consultation, CP26/5, proposed that listed companies report against UK SRS S2 on a mandatory basis, with only Scope 3 and UK SRS S1 on comply or explain.
The final rules did not keep that: PS26/19 requires “a comply or explain approach across all categories of disclosures” (¶1.7), which brings UK SRS S2 into line with S1 and Scope 3.
The made rule for commercial companies is UKLR 6.6.6R(7A): climate-related financial disclosures prepared in accordance with UK SRS S2, or a statement of what has not been met, why, and the steps planned.
The rules apply to accounting periods beginning on or after 1 January 2027, with first reporting in 2028 (¶3.12).
Outside the listing rules, the Department for Business and Trade says the standards are “available for voluntary use, by any entity that chooses to do so”.
The whole of the FCA’s decision is on UK SRS and the FCA, and what an S2 explanation must contain is on UK SRS comply or explain.
Your own first period depends on your year-end, and the UK SRS deadline page works it out.
| Who | Basis for UK SRS S2 |
|---|---|
| Listed in UKLR 6, 14, 15, 16 or 22 | Comply or explain, periods from 1 Jan 2027 |
| Listed in UKLR 11, 12, 13, 17, 18 or 19 | Not in scope of the rules |
| Any other UK entity | Voluntary use |
| Companies Act CFD reporters | May use UK SRS S2 to meet s.414CB(2A) |
Core content
Four pillars, carried over from the TCFD
UK SRS S2 organises every disclosure under the four headings the TCFD recommendations introduced, and adds the paragraph structure that makes each one checkable.
Governance
Which body or individual oversees climate-related risks and opportunities, how often it is informed, how it sets targets, and management's role in the controls and procedures.
Strategy
The risks and opportunities, their effect on the business model, value chain and financial position, any transition plan, and resilience tested by scenario analysis.
Risk management
How climate-related risks and opportunities are identified, assessed, prioritised and monitored, and whether that feeds the entity's overall risk process.
Metrics and targets
The seven cross-industry metric categories, industry-based metrics, and every climate-related target with its base period, milestones and progress.
The TCFD disbanded in October 2023, and the IFRS Foundation describes the ISSB Standards as the “culmination of the work of the TCFD”.
For a company moving from TCFD-aligned reporting, the headings are familiar and the paragraphs are not, and the line-by-line mapping is on TCFD vs UK SRS.
Governance under ¶6 names the body or individual responsible and asks how climate-related targets are overseen, which is the subject of UK SRS board oversight.
Every paragraph of all four pillars, with its sub-limbs, is set out on UK SRS S2 climate disclosures.
Metrics and targets
The seven cross-industry metrics, and what sits beside them
Paragraph 28 splits the metrics pillar into three limbs: the cross-industry categories, industry-based metrics, and targets.
A company that answers all seven parts of ¶29 has met the first of the three, not the pillar.
Greenhouse gases are measured under the GHG Protocol Corporate Standard (2004), unless a jurisdictional authority or the exchange requires another method (¶29(a)(ii)).
Scope 2 is reported on a location basis: ¶B30 says the entity “is required to disclose its Scope 2 greenhouse gas emissions using a location-based approach”, and market-based figures are permitted, not required.
The UK factors most companies use for that calculation are on UK emission factors.
Internal carbon prices under ¶29(f) are framed “whether and how”, so a company that uses none still has something to disclose.
Industry-based metrics are required by ¶32, but the ISSB’s Industry-based Guidance is something the company “may refer to”, not must.
Targets under ¶¶33–36 carry eight descriptors each, and a net emissions target must be shown beside its gross target, with any planned use of carbon credits explained (¶36(c), (e)).
| ¶29 | Metric category | What is disclosed |
|---|---|---|
| (a) | Greenhouse gases | Absolute gross Scope 1, 2 and 3 in tonnes CO₂e |
| (b) | Transition risks | Amount and percentage of assets or activities vulnerable |
| (c) | Physical risks | Amount and percentage of assets or activities vulnerable |
| (d) | Opportunities | Amount and percentage of assets or activities aligned |
| (e) | Capital deployment | Capex, financing or investment deployed |
| (f) | Internal carbon prices | Whether and how applied, and the price per tonne |
| (g) | Remuneration | Whether and how, and the percentage linked to climate |
Strategy
Scenario analysis: required, and proportionate
Paragraph 22 does not let a company choose whether to run scenario analysis; it lets it choose how deep to go.
The disclosure has two halves: the resilience assessment itself under ¶22(a), and how and when the analysis was done under ¶22(b).
The inputs to disclose include which scenarios were used and their sources, whether one is aligned with the latest international agreement on climate change, and the time horizons (¶22(b)(i)).
The standard names no scenario set, so a company picks its own and explains why each is relevant.
What the requirement asks of a listed company is on climate scenario analysis under UK SRS, and how to run one is on the scenario analysis guide.
¶22: the entity “shall use climate-related scenario analysis to assess its climate resilience using an approach that is commensurate with the entity’s circumstances”.
¶B8: the approach must let it consider all reasonable and supportable information available without undue cost or effort.
¶B18: the analysis may follow the strategic planning cycle, but the resilience assessment is carried out every year.
UK SRS S2 vs IFRS S2
Every difference from IFRS S2, from Annex A
The government’s consultation response carries the authoritative list, and its own rule makes the list complete.
“Where requirements in the standards are not included in the table, there are no differences between the two.”
| IFRS S2 | UK SRS S2 | What changed | Direction |
|---|---|---|---|
| ¶¶12, 23, 32 | ¶¶12, 23, 32 | "Shall" became "may": the entity may refer to and consider the Industry-based Guidance on Implementing IFRS S2 | Permissive |
| — | ¶B59A | Added: a financial institution that cannot reliably estimate financed emissions for the same period as its financial statements discloses why, its approach, and its plan with a timeline | Stricter |
| ¶¶C1–C2 | ¶C2 | Effective date removed; S1 and S2 are still applied at the same time | Timing left to UK law |
| ¶C3 | ¶C1 | No comparatives in the first period; date-of-initial-application reference removed | Unchanged in substance |
| ¶C4(a) | ¶C3 | Alternative GHG measurement method, still limited to the first annual reporting period | Timed |
| ¶C4(b) | ¶C4 | Scope 3 relief kept, with the reference to the first annual reporting period removed | Untimed in the standard |
| — | ¶C6 | Added: where UK law or regulation requires S2, the reliefs are subject to the Companies Act, FCA rules or another UK authority | UK override |
| ¶C5 | ¶C5 | Adds that use of the reliefs is disclosed alongside the statement of compliance, per UK SRS S1 ¶73A | Disclosure |
Paragraph B59A is the one place where the UK text asks for more than the ISSB’s, and every other change loosens or defers.
Paragraphs ¶¶29A–29C, which let a company limit Category 15 to financed emissions and exclude derivatives, are the ISSB’s own December 2025 amendments, not UK amendments.
Annex A says so: because UK SRS S2 was issued after those amendments, they “have themselves been included in UK SRS S2 and are fully consistent”.
The body paragraphs keep their IFRS numbers, but the transition appendix was renumbered, so “C4” means the Scope 3 relief in UK SRS S2 and a combined, time-limited paragraph in IFRS S2.
Future ISSB changes do not flow through by themselves: the FRC says new or amended ISSB standards “would not automatically apply in the UK” without endorsement.
How the endorsement worked, and why the government removed the relief periods, is on UK SRS endorsement.
Reliefs
The Scope 3 relief: untimed in the standard, one year under the FCA
Paragraph C4 says an entity applying the standard “is not required to disclose its Scope 3 greenhouse gas emissions”, including the financed-emissions detail for banks, insurers and asset managers.
The standard sets no end to that relief, and the FRC says voluntary users “can use reliefs without time limits, indefinitely”.
For listed companies the FCA has timed it: one year of non-disclosure of Scope 3 from initial application (PS26/19 ¶3.14).
A company using the relief states that it is doing so, and needs give no further explanation during the relief period (¶3.20).
From periods beginning on or after 1 January 2028 the relief has expired and Scope 3 is disclosed or explained (¶3.23); nothing about it becomes mandatory.
The relief is from disclosure, not from measurement, and the data work is set out on Scope 3 reporting under UK SRS.
UK SRS S1 ¶73A lets a company using C3 or C4 still assert compliance with UK SRS S2, provided it discloses its use of the relief alongside the statement.
Company law
UK SRS S2 and the Companies Act
UK SRS S2 has a second use outside the listing rules.
Companies caught by the Companies Act climate-related financial disclosure duty in section 414CB may use a national reporting framework under s.414CB(6) instead of duplicating the eight disclosures in s.414CB(2A).
The government confirmed in its consultation response that UK SRS S2 is such a framework.
The FRC puts it in practical terms: it “will not be necessary for UK entities to duplicate” those disclosures “so long as use of UK SRS S2 is clearly referenced”.
The government has also said that UK SRS disclosures placed within the strategic report attract the directors’ liability protection in section 463 of the Companies Act, so where the disclosures sit matters.
The Modernising corporate reporting consultation, open until 30 November 2026, says only that the government “will consider” how UK SRS should be reflected in the Companies Act.
Where the work is
Five requirements that take the most preparation
These are the paragraphs where a first-time reporter usually has no ready-made data, and each has its own page on this site.
Scope 3
All 15 categories considered, the included ones disclosed, measured under a data hierarchy that prefers primary and verified inputs.
Climate resilience
A resilience assessment every year, with the scenarios, assumptions and horizons behind it.
Exposure amounts
The amount and percentage of assets or activities vulnerable to transition and physical risk, and aligned with opportunities.
Transition plan
Information about any plan the company has, its assumptions and dependencies; under the FCA rules, whether one is published and where.
Financed emissions
For banks, insurers and asset managers, an explanation and a timeline where financed emissions cannot be estimated for the same period.
How to word each pillar once the data exists is covered on writing a UK SRS S2 disclosure.
To talk through where your own gaps are, you can book a free 15-minute call.
Frequently asked
UK SRS S2 — frequently asked
What is UK SRS S2?
UK SRS S2 Climate-related Disclosures is the UK standard for reporting climate-related risks and opportunities that could reasonably be expected to affect a company's cash flows, access to finance or cost of capital. It was issued by the Secretary of State for Business and Trade on 25 February 2026 and is the UK endorsement of the ISSB's IFRS S2. It is set out in paragraphs 1–37 and Appendices A–C, and is applied together with UK SRS S1.
Is UK SRS S2 mandatory?
No. The FCA's final rules in PS26/19, published on 30 September 2026, require listed companies in UKLR 6, 14, 15, 16 and 22 to report against UK SRS S2 on a comply-or-explain basis for accounting periods beginning on or after 1 January 2027. CP26/5 had proposed making UK SRS S2 mandatory; the final rules did not. For every other entity UK SRS S2 is available for voluntary use.
What is the difference between UK SRS S2 and IFRS S2?
Annex A of the government's consultation response lists every difference. In paragraphs 12, 23 and 32 "shall" became "may" for the Industry-based Guidance on Implementing IFRS S2. Paragraph B59A was added, requiring a financial institution that cannot reliably estimate financed emissions for the same period as its financial statements to explain why and give its plan. The effective date was removed, the Scope 3 relief in paragraph C4 lost its one-year limit, and paragraph C6 makes the reliefs subject to UK law or FCA rules. The ISSB's December 2025 amendments are included and are the ISSB's, not UK changes.
Does UK SRS S2 require Scope 3 emissions?
Yes. Paragraph 29(a)(i)(3) requires absolute gross Scope 3 greenhouse gas emissions, and paragraph B32 requires the company to consider all 15 GHG Protocol categories and disclose which it includes. Paragraph C4 lets a company not disclose Scope 3. Under the FCA rules that relief is available for one year from initial application, after which Scope 3 is disclosed or explained.
Does UK SRS S2 require scenario analysis?
Yes. Paragraph 22 says the entity "shall use climate-related scenario analysis to assess its climate resilience using an approach that is commensurate with the entity's circumstances". Paragraph B8 sets the proportionality test. What scales is the depth of the analysis, not whether it is done. Paragraph B18 allows the analysis itself to follow the strategic planning cycle, but the resilience assessment is updated every year.
Does UK SRS S2 require a transition plan?
No. Paragraph 14(a)(iv) requires information about any climate-related transition plan the entity has, including its key assumptions and dependencies. The FCA's final rules require a listed company to state whether it has published a transition plan and where, or why not, and the FCA says it is not requiring companies to produce one.
What are the seven cross-industry metrics in UK SRS S2?
Paragraph 29 lists greenhouse gases (Scope 1, 2 and 3), the amount and percentage of assets or business activities vulnerable to transition risk, the same for physical risk, the amount and percentage aligned with climate-related opportunities, capital deployed towards climate-related risks and opportunities, internal carbon prices, and the share of executive remuneration linked to climate-related considerations.
Can a company say it complies with UK SRS S2 while using the Scope 3 relief?
Yes. UK SRS S1 paragraph 73A says an entity using the Scope 3 relief, the first-year GHG Protocol relief or the climate-first relief is not prevented from asserting compliance with UK SRS S2, but it must disclose its use of those provisions alongside the statement of compliance. A company using the climate-first relief cannot assert compliance with UK SRS S1.
Does UK SRS S2 require dual Scope 2 reporting?
No. Paragraph 29(a)(v) and paragraph B30 require location-based Scope 2 emissions, plus information about contractual instruments only where they exist and inform users' understanding. Paragraph B31 permits, but does not require, market-based figures.
Sources
Primary sources
Every figure, date and status on this page traces to the instrument’s owner. Secondary commentary is never the source for a number.
- Department for Business and TradeUK SRS S2 Climate-related Disclosures (PDF)
The standard itself: ¶¶1–4 objective and scope, ¶¶5–37 core content, ¶¶29A–29C Category 15, ¶B8 proportionality, ¶B18 cadence, ¶¶B30–B33 Scope 2 and 3, ¶B59A, ¶¶C1–C6.
- Department for Business and TradeUK SRS S1 General Requirements (PDF)
¶73A (compliance statement when reliefs are used), ¶E3 (climate-first) and ¶C2 of S2's companion requirement to apply both standards together.
- Department for Business and TradeUK SRS S1 and UK SRS S2 — publication page
Published 25 February 2026: the two standards, each 45 pages.
- Department for Business and TradeUK Sustainability Reporting Standards — guidance
"Available for voluntary use, by any entity that chooses to do so."
- Department for Business and TradeUK SRS consultation response, Annex A — UK SRS S2 vs IFRS S2 (PDF)
The authoritative list of differences, and its rule: "Where requirements in the standards are not included in the table, there are no differences between the two."
- Financial Conduct AuthorityPS26/19: Aligning listed issuers' sustainability disclosures with international standards (PDF)
Comply or explain across UK SRS (¶¶1.2, 1.7); scope (¶3.6); dates (¶3.12); reliefs (¶¶3.14, 3.20–3.24); made rule UKLR 6.6.6R(7A) in Appendix 1.
- Financial Conduct AuthorityPS26/19 landing page
First published 30 September 2026: comply or explain across UK SRS; Technical Note feedback by 28 October 2026; FCA webinar on 19 October 2026; supervisory information in the second half of 2027.
- FCA HandbookUKLR 6.6 — annual financial report (commercial companies)
Where UKLR 6.6.6R(7A) — the UK SRS S2 comply-or-explain limb — sits from 1 January 2027.
- Financial Conduct AuthorityCP26/5 consultation page
The January 2026 proposal to make UK SRS S2 mandatory (excluding Scope 3), which the final rules did not adopt.
- IFRS FoundationIFRS S2 Climate-related Disclosures
The ISSB baseline UK SRS S2 endorses, issued 26 June 2023 and amended in December 2025.
- IFRS FoundationAmendments to Greenhouse Gas Emissions Disclosures (Amendments to IFRS S2), December 2025 (PDF)
¶¶29A–29C (the Category 15 limitation) — the ISSB's amendments, carried into UK SRS S2.
- IFRS FoundationISSB and TCFD
The TCFD disbanded in October 2023; the ISSB Standards are the "culmination of the work of the TCFD".
- Financial Reporting CouncilSustainability reporting developments — FAQs
Voluntary users may use reliefs "without time limits, indefinitely"; future ISSB amendments need UK endorsement; no duplication under s.414CB(2A) where UK SRS S2 is used.
- legislation.gov.ukCompanies Act 2006, section 414CB
s.414CB(6): UK SRS S2 is a national reporting framework for the Companies Act climate-related financial disclosures.
- GHG ProtocolCorporate Accounting and Reporting Standard
The Scope 1 and 2 measurement basis UK SRS S2 ¶29(a)(ii) names (2004 edition).
Continue reading
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UK SRS S2 climate disclosures
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