UK SRS is coming: Is your organisation ready?

This article is provided by BRC Associate Member, Inspired.

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The FCA's rules apply from January 2027. Here is what UK SRS means for retailers and how to start preparing.

UK retailers are facing a major shift in sustainability reporting. The introduction of UK Sustainability Reporting Standards (UK SRS) will move listed companies beyond existing TCFD-aligned climate reporting towards a broader, investor-focused framework that connects sustainability more closely with financial performance and decision-making.

What has changed?

The FCA has finalised new rules requiring in-scope listed companies to report against UK SRS on a comply-or-explain basis for accounting periods beginning on or after 1st January 2027. 

UK SRS S1 and S2, based on the IFRS Sustainability Disclosure Standards, will replace the existing TCFD-aligned listing requirements and bring UK sustainability reporting into closer alignment with international standards for financially material sustainability-related risks and opportunities.

This approach will improve the consistency and comparability of sustainability disclosures, give stakeholders clearer insight into financially material sustainability matters, and help organisations prepare for evolving reporting expectations.

What are UK SRS S1 and S2?

UK SRS S1 outlines the general requirements for disclosure of sustainability-related financial information. This standard provides the overarching framework for sustainability reporting including:

• Identify and assess the financial impact of sustainability-related risks and opportunities over the short, medium and long term.

• Evidence how sustainability-related risks and opportunities are considered within financial planning and strategic decision-making.

• Report on material sustainability-related information across the four pillars of governance, strategy, risk management, and metrics and targets.

UK SRS S2 focuses solely on climate-related financial disclosures, requiring companies to report on:

• Identification and assessment of climate-related risks and opportunities.

• Scenario analysis to assess resilience under different climate pathways.

• Greenhouse gas (GHG) emissions including Scopes 1 and 2 and, subject to the applicable requirements and reliefs, Scope 3.

The FCA rules also set out how the new requirements will be applied in practice:

• Comply or explain: Companies are expected to report against the standards or explain which disclosures have not been provided, why, and the steps being taken to address the gaps.

• Transitional reliefs: A one-year relief applies to Scope 3 emissions reporting, with a two-year relief for wider, non-climate disclosures under S1.

• Greater transparency: The rules also introduce requirements relating to transition plans and disclosure of any voluntary sustainability assurance.

From TCFD to UK SRS

For companies already reporting against TCFD, the good news is that much of the groundwork is already in place. UK SRS retains the familiar four pillars of governance, strategy, risk management, and metrics and targets, allowing businesses to leverage and build upon existing processes, data and controls rather than start again.

 
The FCA’s review of existing TCFD reporting found stronger self-reported disclosure against governance and risk management, with comparatively weaker disclosure against strategy and metrics and targets. These are therefore sensible areas for businesses to prioritise as they prepare for UK SRS.

What does this mean for UK retailers?

For listed retailers, UK SRS is now an immediate reporting priority. For the wider retail sector, it also signals the direction of travel for UK sustainability reporting and the information increasingly expected by investors, customers and across value chains.

The key shift is from reporting historic sustainability metrics to understanding how sustainability-related risks and opportunities could affect financial performance and business strategy. Done well, UK SRS can strengthen decision-making by embedding material sustainability information into financial planning, strategy and risk management.

Several areas are likely to require particular focus for retailers:

• Scope 3 emissions: For many retailers, a significant proportion of emissions sits within purchased goods and the wider value chain, making supplier engagement and robust data increasingly important.

• Scenario analysis: Retailers will need to consider physical risks affecting stores, distribution networks and sourcing regions, alongside transition risks across operations, supply chains and changing consumer markets.

• Cross-functional data: Relevant information often sits across property, procurement, buying, finance, risk and legal teams. Clear ownership, governance and controls will be essential.

• Beyond climate: Many retailers have more established climate reporting processes, meaning the broader sustainability-related risks and opportunities covered by S1 may require additional focus.

Five practical steps to start now

1. Confirm your position: Determine whether your organisation is in scope and when your first reporting period begins.

2. Assess your readiness: Compare existing disclosures, processes and controls against UK SRS requirements to identify priority gaps.

3. Identify what is financially material: Identify which sustainability risks and opportunities could affect your financial position.

4. Strengthen data and controls. Review the quality, ownership and governance of sustainability data, with particular attention to Scope 3 emissions, value-chain information and wider sustainability topics.

5. Integrate sustainability across the business. Connect sustainability reporting with finance, strategy and risk management so that material information informs business planning and decision-making.

The key is to start early. Understanding the gaps now gives retailers time to strengthen data, governance and internal processes before reporting requirements take effect.

To help retailers understand what the new requirements mean in practice, Inspired is hosting From TCFD to UK SRS: A Practical Guide for Retailers with the British Retail Consortium on Wednesday 25 November 2026 at 2:00pm. Register your free place here.