Legal development

Government publishes an update on UK Sustainability Disclosure Requirements (SDR) and Sustainability Reporting Standards (SRS)

Government publishes an update on UK Sustainability Disclosure Requirements (SDR) and Sustainability Reporting Standards (SRS)


    On 16 May 2024, the government published an update on implementation of the UK's Sustainability Disclosure Requirements (SDR) and a policy paper containing a framework and Terms of Reference (ToR) for developing UK sustainability reporting standards (SRS). These documents follow the government's commitment in its 2023 Green Finance Strategy to establish a framework to assess and decide whether to endorse the International Financial Reporting Standards (IFRS) sustainability disclosure standards (SDS) for use within a UK context.

    The UK is one of several countries that have committed to adopt the IFRS SDS, including Australia, Canada and Japan and some countries have already adopted them on a voluntary or mandatory basis (e.g. Turkey). Further details on adoption can be found on IFRS' website.

    Implementation update on UK SDR 

    The implementation update, which includes a helpful timeline, states that the government aims to make endorsement decisions on the first two UK SRS and publish them in Q1 2025. To support this, TAC will start its assessment of IFRS S1 and S2 in Q2 2024. The government plans to consult on draft UK SRS and take a decision on endorsing them in Q1 2025. 

    Subject to a positive endorsement decision by the UK government, the FCA will consult in 2025 on using the UK SRS to introduce requirements for UK-listed companies to report sustainability-related information. 

    The government will also decide on disclosure requirements against UK SRS for UK companies that are not regulated by the FCA. The government anticipates that a decision on future requirements will be taken in Q2 2025. At that time, the government will also consider whether to create exemptions from pre-existing requirements in the Companies Act 2006 for companies that voluntarily use the UK SRS. Owing to the need for consultation and legislation, the earliest that any changes could be effective would be for accounting periods beginning on or after 1 January 2026.

    The update confirms that the government will consult in Q2 2024 on how large UK companies can disclose their climate transition plans (TPs). It also states that, as part of its consultation on implementing UK-endorsed IFRS standards, the FCA plans to consult on strengthening its expectations for TP disclosures with reference to the TPT Disclosure Framework, which was published in October 2023 (see Transition Plan Taskforce issues Disclosure Framework and consults on sector guidance (

    The update also sets out what the government intends to do in respect of overseas funds and the UK Green Taxonomy.

    • Overseas Funds Regime (OFR) – The government will consult on whether to broaden the scope of the UK SDR to include funds under the OFR in Q3 2024 (see Financial Services SpeedRead: 8 February 2024 ( Subject to the consultation outcome, any legislation to implement SDR and labelling for OFR would be likely to be published in 2025.
    • UK Green Taxonomy – The government expects to consult in 2024 on the overarching framework and use cases for the proposed UK Green Taxonomy as well as the specific activity level criteria which define green activities. The government has not yet decided whether to make disclosures against the Taxonomy mandatory and it intends to introduce a testing period for voluntary disclosures and use for at least two reporting years before exploring a mandatory regime.

    Policy paper on UK SRS 

    The policy paper explains the process for the UK to endorse the IFRS's SDS, the first two of which (known as S1 and S2) were published in June 2023 (see ISSB publishes first standards on sustainability and climate disclosures ( The paper also explains the associated roles and responsibilities of the UK government, UK regulators, standard-setters and advisory committees as well as explaining that development of UK SRS is one part of a wider programme that the UK government is undertaking, alongside the FCA, to develop a UK SDR regime.

    The policy paper comprises three sections:

    • Section A: Overview of UK Framework – this summarises the overall framework that is being established to allow stakeholders to understand the phases of development of the UK SRS and the legislative or regulatory changes needed to implement them.
    • Section B: UK Sustainability Disclosure Technical Advisory Committee (TAC) ToR – the role of TAC is to assess the IFRS SDS on a technical basis and make independent recommendations on endorsement by the UK government. The policy paper also provides information on TAC's membership, working arrangements and its key roles and responsibilities in providing advice to the Secretary of State for Business and Trade (SoS). The membership of TAC will include preparers and users of sustainability reports. Agendas and papers for its meetings will be publicly available on the Financial Reporting Council's website ahead of each relevant meeting and a summary of proceedings will be published within 10 working days.
    • Section C: UK Sustainability Disclosure Policy and Implementation Committee (PIC) ToR – PIC will coordinate the implementation of any UK SRS. The ToR provide detail regarding the PIC’s membership and its key roles and responsibilities within the endorsement and implementation framework. PIC meetings will be private but a summary will be published on GOV.UK within 10 working days of each meeting.

    Key points to note:

    • The SoS will be responsible for endorsing the IFRS SDS to create UK SRS that UK companies can use on a voluntary basis and that future legislative or regulatory disclosure requirements (implementation) will be based on. The SoS' endorsement decision will be supported by recommendations and advice from TAC and the Department for Business & Trade (DTB).
    • The FCA is responsible for implementation relating to listed companies, while DTB is responsible for implementation decisions relating to UK registered companies. PIC is responsible for coordinating those implementation decisions by the FCA and DTB.
    • Amongst other things, TAC's advice to the SoS will consider whether using the IFRS SDS is likely to improve the quality and international comparability of sustainability-related reporting in the UK. The DTB's advice to the SoS will focus on whether use of the IFRS SDS will encourage UK’s economic growth and international competitiveness and whether they are suitable for inclusion in, UK domestic legislation and regulation.
    • Changes to the IFRS SDS will only be proposed by TAC or DTB if (i) they are necessary for the effective application of the IFRS SDS within a UK context, (ii) failing to do so would be of detriment to the long-term public good in the UK, or (iii) they are desirable, to build upon the material provided within the global baseline provided by the IFRS SDS.
    • Once the SoS has considered TAC and DTB's advice they will consult on a draft UK SRS and take a final decision on creating a UK SRS.
    • Implementation will involve considering the size and type of companies that might be required to make disclosures using the UK SRS, the timetable for introducing such requirements and any exemptions needed for companies using the UK SRS.
    • The government recognises that companies, and professional and business service providers will need time to familiarise themselves with new requirements, and to amend their resource and processes appropriately. When making implementation decisions, the UK government and the FCA will, therefore, attempt to give sufficient notice before any future changes come into force.

    The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to.
    Readers should take legal advice before applying it to specific issues or transactions.


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