UK Sustainability Reporting Standard S1 (Draft) Summary

1.1 Objective

The UK SRS S1 establishes disclosure requirements for sustainability-related financial information to help primary users (investors, lenders, and other creditors) assess:

• Entity's exposure to sustainability risks
• Opportunities arising from sustainability matters
• Resilience of the entity's business model and strategy

1.2 Scope

Applies to all sustainability-related risks and opportunities that could reasonably be expected to affect the entity's:

• Cash flows
• Access to finance
• Cost of capital
• Value creation over short, medium, and long term

Key UK amendment: Focuses on financial materiality rather than the EU's double materiality approach.

2.1 Governance

Entities must disclose:

Element	Disclosure Requirements
Governance bodies	Roles and responsibilities of those overseeing sustainability risks/opportunities
Management's role	How management monitors and manages sustainability matters
Integration	How sustainability is considered in decision-making processes

2.2 Strategy

Element	Disclosure Requirements
Business model	How sustainability affects current and future business model
Strategy	Approach to addressing sustainability risks/opportunities
Time horizons	Short, medium, and long-term considerations
Resilience	Assessment of strategy resilience under different scenarios

2.3 Risk Management

Entities must describe:

• Processes to identify and assess sustainability risks
• How risks are prioritized and managed
• Integration with overall risk management framework

2.4 Metrics and Targets

Requirements include:

• Quantitative and qualitative metrics used to measure performance
• Targets set by management or required by law/regulation
• Progress toward meeting targets
• Industry-specific metrics (SASB-based, but voluntary in UK SRS)

3.1 Climate-First Approach

Major UK amendment: Extended transition relief:

Phase	Timing	Requirements
Phase 1	Year 1	Climate disclosures only (excluding Scope 3 emissions)
Phase 2	Year 2	Climate disclosures including Scope 3 emissions
Phase 3	Year 3	Full sustainability disclosures

3.2 Connectivity Principle

Key change: Removal of IFRS S1's option to delay sustainability disclosures relative to financial statements in the first year.

UK SRS requires:

• Simultaneous publication of financial and sustainability reports
• Explicit connections between sustainability and financial information
• Cross-referencing between reports where appropriate

3.3 Legal Safeguards

UK-specific provisions for forward-looking information:

• Clear distinction between historical and forward-looking information
• Qualitative disclosures about assumptions and uncertainties
• Protections against liability for good faith projections

3.4 Industry Standards

UK modification: While IFRS S1 references SASB standards, UK SRS:

• Allows but does not mandate use of SASB industry standards
• Removes requirement to use GICS classification for financed emissions
• Provides flexibility for UK-specific industry considerations

4.1 Effective Date

The draft removes the effective date from IFRS S1. Implementation will be determined by:

• FCA listing rules for public companies
• UK government regulations for other entities
• Expected to be phased from 2026 onwards

4.2 Proportionality

UK approach considers:

• Size and complexity of entities
• Existing reporting capabilities
• Gradual build-up of requirements over 3 years

4.3 Assurance Considerations

While not currently mandated, the standard encourages:

• Preparation for future assurance requirements
• Development of internal controls for sustainability data
• Documentation of methodologies and assumptions

5.1 Consultation Process

• Open for comments until 17 September 2025
• Focus areas for feedback: costs, benefits, and practical implementation
• Particular interest in views on UK-specific amendments

5.2 Expected Timeline

Milestone	Timing
Consultation closes	17 September 2025
Final standards published	Late 2025
First mandatory reporting	2026 (for some entities)
Full implementation	2028