Sustainability reporting in 2026

The UK is preparing to hardwire the International Sustainability Standards Board’s (ISSB) sustainability reporting standards into domestic regulation through the UK Sustainability Reporting Standards (UK SRS), joining over 30 other jurisdictions in adopting this unified global sustainability reporting standard. Given these changes, we outline the status, scope and considerations for companies getting ISSB ready.

Nature reporting is also increasingly coming to the fore. The Taskforce on Nature-related Financial Disclosures (TNFD) continued to shape market practice in 2025. It has recently crossed a critical inflection point, following the ISSB’s recent announcement that it intends to pursue standard-setting for nature-related disclosure requirements.

UK SRS: status, scope and what to expect in 2026

Even if the details have been some time in coming, the direction of travel is clear. The UK intends to endorse International Financial Reporting Standards (IFRS) S1 (crosscutting sustainability) and IFRS S2 (climate) into the UK SRS with minimal UK specific amendments. The UK government’s consultation on exposure drafts indicated an emphasis on proportionality, interoperability and a commitment to keeping divergence from the ISSB to a minimum. Emerging design features include:

• climate-focused reporting, based on IFRS S2, for the first two years, with broader sustainability reporting, based on IFRS S1, starting in the third year;
• a one-year relief on scope 3 emissions reporting; and

• making the Sustainability Accounting Standards Board (SASB) industry standards voluntary.

Who these disclosure requirements apply to, and when, are still the key unknown variables to monitor. Although this is still subject to further consultation, the current expectation is that the UK SRS will initially capture UK listed companies and potentially large private companies/LLPs, aligning with existing UK reporting requirements.

We expect the UK government to endorse a decision and publish the final standards in early 2026, with a further consultation on the scope of the regime to follow. The Financial Conduct Authority (FCA) has also stated that it would consult on the implementation of the UK SRS, which is expected to follow an endorsement decision in early 2026. The earliest that reporting is likely to start is January 2027, in respect of financial year 2026.

Getting ISSB ready: priorities for companies

The UK SRS are likely to represent a step change in UK sustainability reporting. Companies should therefore be mindful of the following:

1. More disclosure can mean more risk: The UK SRS are likely to require companies to disclose a greater breadth and depth of sustainability information, including statements based on third party data and forward-looking statements. While there are existing Companies Act protections, this could result in greater risks of misstatement and associated litigation and regulatory risks.

2. An opportunity to reflect: The change represents an opportunity for companies to re-evaluate how they want to approach sustainability as part of their wider business strategy.

3. Financial disclosures: The ISSB focus on connectivity with financial reporting is likely to be of particular interest to investors and other stakeholders. This will likely require more robust data processes and clear strategies to address any significant impacts or risks identified.

4. Get involved: With so much dependent on future consultations, companies should consider actively participating to help shape the future of UK sustainability reporting.

Hong Kong offers useful parallels, being ahead of the UK in having implemented IFRS S2-aligned climate-related disclosures. The requirements came into effect on 1 January 2025 and are to be implemented by listed issuers in phases. This is intended to be an interim step towards full adoption of the ISSB standards (S1 and S2), which are expected to apply to large listed issuers and financial institutions from 2028. Reporters looking to make the step up to ISSB reporting may find resources such as The Hong Kong Stock Exchange’s Implementation Guidance on Climate Disclosures helpful, and gain insight from the sustainability reporting of Hong Kong issuers.

Nature reporting

Nature reporting is still nascent, with early adopters facing challenges ranging from inadequate data to difficult questions of quantification. The key message from organisations like the TNFD has been for all companies, wherever they are on nature, to get started.

As a result of the its Biodiversity, Ecosystems and Ecosystem Services (BEES) research project, the ISSB announced in November 2025 that it will undertake further standard setting to introduce incremental disclosure requirements on nature-related risks and opportunities not already reflected in explicit requirements in IFRS S1 and S2, with potential options ranging from a dedicated standard to incremental changes to S1 and S2 and accompanying implementation guidance.

While there is a longer road to adoption for nature reporting, it’s worth noting that both the EU’s CSRD as well as IFRS S1 already require companies to disclose material nature-related risks and opportunities. Any UK companies in-scope of the CSRD or IFRS S1 disclosures in other jurisdictions should therefore already be taking nature-related risks and opportunities into account. This presents an opportunity to identify learnings that are relevant in the UK context.

A practical takeaway is to build TNFD informed capabilities under the S1 architecture, rather than alongside it. Geolocating assets, screening for sensitive ecosystems, assessing dependencies and impacts and translating findings into assurable metrics can preserve interoperability with CSRD, hedge regulatory uncertainty and ready organisations for an ISSB led evolution of nature reporting.

Looking ahead

With so much of the recent focus being on the EU’s sustainability reporting simplification efforts, it is important that reporters do not lose sight of the evolving landscape in the UK. The more predictable and pragmatic UK approach is welcome, but also means that reporters have been given a clear signal to get started on preparing.