UK Sustainability Disclosure Requirements (SDR)

Status, September 2026: The UK government has finalised the UK Sustainability Reporting Standards (UK SRS S1 and S2, based on the ISSB standards) for voluntary use while it and the FCA consider mandatory reporting. Under the FCA's SDR regime, entity-level disclosures apply to firms with £50bn or more in assets under management from December 2, 2025 and to other in-scope firms from December 2, 2026; the anti-greenwashing rule applies to all FCA-regulated firms. Source: FCA.

What Are UK Sustainability Disclosure Requirements?

The UK Sustainability Disclosure Requirements (SDR) represent the UK's post-Brexit approach to sustainability disclosure regulation. The framework consists of:

1. Corporate reporting: ISSB-based sustainability disclosure for companies
2. Investment labels: FCA sustainability product labeling regime for asset managers
3. Anti-greenwashing: Rules preventing misleading sustainability claims

In February 2026 the UK government issued the UK Sustainability Reporting Standards (UK SRS S1 and S2), its endorsed versions of IFRS S1 and S2 with limited UK amendments, for voluntary use. They will form the basis of any future mandatory requirements.

Who It Applies To

Corporate reporting:

• UK-listed companies: the FCA's January 2026 consultation (CP26/5) proposes replacing its TCFD-aligned listing rules with UK SRS-based reporting for commercial companies and other listed categories
• Large unlisted companies and LLPs: TCFD-aligned climate disclosures have been required under the Companies Act since 2022; the government will decide later whether to require UK SRS

Investment product labels:

• FCA-regulated asset managers
• Firms marketing investment products in the UK
• Applies to UK funds; in April 2025 the FCA decided not to extend the regime to portfolio management for now

Key Requirements

Corporate sustainability reporting (ISSB-based):

• Disclose sustainability-related financial information following IFRS S1 and S2 (as endorsed for UK use)
• Governance, strategy, risk management, metrics and targets for material sustainability topics
• Climate-specific disclosures including Scope 1, 2, and 3 emissions
• Scenario analysis and transition plan disclosures
• Consistency with financial statements

Investment product labeling:

• Four sustainability labels: Sustainability Focus, Sustainability Improvers, Sustainability Impact, Sustainability Mixed Goals
• Qualifying criteria including investment strategy, KPIs, stewardship approach
• Anti-greenwashing rule: sustainability-related claims must be fair, clear, and not misleading
• Consumer-facing disclosure requirements and detailed product-level reports

Transition Plan Taskforce (TPT):

• UK-specific framework for transition plan disclosures; its materials are now hosted by the IFRS Foundation
• Complements ISSB/TCFD with detailed guidance on climate transition planning
• The government consulted in 2025 on requiring UK-regulated financial institutions and FTSE 100 companies to develop and implement 1.5°C-aligned transition plans; it has not yet published its decision

Timeline

• 2023: FCA published SDR policy statement for investment products
• May 2024: Anti-greenwashing rule took effect; sustainability labels available from July 31, 2024
• December 2024: Naming and marketing rules for investment products
• December 2025: Entity-level sustainability disclosures begin for asset managers with more than £50 billion in AUM (December 2026 for those above £5 billion)
• January–February 2026: FCA consults on UK SRS-based rules for listed companies (CP26/5); government publishes final UK SRS for voluntary use
• January 2027: Proposed start of UK SRS-based reporting for listed companies (final FCA rules expected in autumn 2026)

Compliance Steps

For corporates:

1. Assess which ISSB requirements apply under UK endorsement
2. Build GHG inventory and climate risk assessment capabilities
3. Develop transition plan following TPT framework
4. Prepare ISSB-aligned disclosures integrated with financial reporting
5. Engage with auditors/assurers on sustainability information

For asset managers:

1. Review product range against sustainability labeling criteria
2. Assess eligibility for sustainability labels
3. Ensure all sustainability claims meet anti-greenwashing standards
4. Prepare consumer-facing and detailed disclosure documents
5. Implement ongoing monitoring and reporting

How Council Fire Can Help

Council Fire helps UK companies and asset managers navigate SDR requirements — from ISSB implementation and transition plan development through investment product labeling compliance. Contact us for UK SDR support.