The UK government has published its final Sustainability Reporting Standards (SRS) for companies and financial institutions.
On Wednesday, the Department for Business and Trade unveiled the first two standards, UK SRS S1 and S2, in a bid to standardise disclosures from entities.
S1 includes the general framework for applying UK SRS, as well as requirements on general sustainability-related risks and opportunities, while S2 focuses on climate disclosures.
The standards are voluntary for the time being, but the Financial Conduct Authority is currently consulting on changes to the UK’s listing rules to incorporate reporting requirements aligned with the SRS.
The government is also expected to introduce reporting rules for some other entities, including unlisted companies.
S1 and S2 are both based on guidance from the International Sustainability Standards Board, and come on the back of a consultation last summer.
They differ in a number of ways from the International Sustainability Standards Board’s (ISSB) version.
For example, under SRS, entities don’t have to refer to materials from the Sustainability Accounting Standards Board, and a number of transitional reliefs have been removed.
Transitional reliefs related to prioritising climate disclosures and Scope 3 carve-outs, may be used indefinitely if the SRS is being applied voluntarily.
Other deadlines and carve-outs will be defined within the specific laws or regulations that embed the standards into official rules.
Importantly for investors, the government gives some breathing space around the disclosure of financed emissions.
The SRS says that, if a financial institution decides it’s impractical to meaningfully estimate its financed emissions for the same reporting period as its financial statements, it can simply explain why, and provide an update on any plans to report in due course.
