Fiona Donnelly

The highly-anticipated UK Sustainability Reporting Standards (SRS) were published by the UK’s Department for Business and Trade this week.

Fiona Donnelly CA, director of sustainability at the Institute of Chartered Accountants of Scotland (ICAS), has welcomed their publication as a “significant milestone”.

The two documents – UK SRS S1 and UK SRS S2 – are closely based on the respective standards issued by the International Sustainability Standards Board (ISSB).

Ms Donnelly said: “Alignment with the ISSB standards strengthens the UK’s global competitiveness and supports access to international capital markets by improving transparency and comparability across the 40 jurisdictions in the process of adopting these international standards.

“It’s also encouraging that the government has expressed its preference for future amendments to be issued by the ISSB, rather than through UK-specific changes, to help preserve ongoing global consistency and comparability.”

However, she continued: “While this is a positive step in the right direction, we still think that the UK SRS should go further.

“More comprehensive and holistic reporting would be achieved by expanding these standards to include reporting on the impact of organisations on people and the planet.

“A ‘double materiality’ approach, long championed by ICAS and embraced in Europe despite the recent simplification measures to reporting, would therefore better serve the needs of multiple stakeholders and support the long-term public interest.”

Ms Donelly added: “It’s disappointing that the standards no longer specify how long the reliefs for non-climate reporting and Greenhouse Gas Scope 3 reporting will apply.

“We appreciate that these topics are complex and rely on reporters obtaining third-party data, but these reliefs may be misused and result in incomplete and less useful disclosures.

“We note that regulatory and other mechanisms can determine the application of these reliefs, so we’ll be watching this closely.”

ICAS will also “look forward to the conclusion of the separate consultation on transition plans, given the crucial role that impact‑focused disclosures play in charting credible pathways to a more sustainable future,” she said.

Ms Donnelly concluded: “2026 is set to be a milestone year for sustainability reporting in the UK. Alongside the Financial Conduct Authority’s current consultation on applying the UK SRS to issuers, we also expect the Department for Business and Trade’s forthcoming consultation on modernising corporate reporting to raise important questions about the future of corporate disclosures.

“ICAS will continue to advocate for disclosure requirements that are proportionate, decision‑useful and interoperable with international regimes.”