UK government sustainability reporting and transition plan consultations
On 25 June 2025, the UK Government launched three key sustainability consultations:
- Consultation on the government’s draft UK Sustainability Reporting Standards (“SRS”) launched by the Department for Business and Trade (“DBT”) (available here);
- Consultation on climate-related transition plan requirements, set out in the UK Government’s manifesto published by the Department for Energy Security and Net Zero (“DESNZ”) (available here); and
- Consultation on third-party sustainability reporting assurance, published by the DBT (available here)
Context:
The consultations come as part of the UK Government’s commitment to establishing a “world-leading sustainable finance framework”, set out in its Mansion House package in November 2024 (see our related article here) and to build on current non-financial reporting requirements.
1. UK SRS Consultation
It is intended that the UK SRS will underpin this framework, by providing clear and comparable information on sustainability-related risks and opportunities.
The draft UK SRS are based on the International Standards Board’s (‘ISSB’) International Financial Reporting Standards (‘IFRS’) on sustainability and climate-related disclosures, IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climate-related Disclosure), which were designed to enable global comparison. While minor UK-specific adjustments have been made, the consultation emphasises that divergence from the ISSB standards has been limited to the extent possible.
The government will consider responses when determining whether to endorse the draft UK SRS. If endorsed, the government has indicated its aim is to publish final standards in Autumn 2025.
Importantly, use of these standards in reporting would initially be voluntary, but may become mandatory for certain entities. The Government will separately consider legal or regulatory requirements to incorporate the UK SRS into an organisation’s legal reporting. If such requirements are introduced, the following organisations would likely be affected:
- listed companies, through incorporation into the Financial Conduct Authority’s listing rules; and
- private companies satisfying certain thresholds for economic significance, via the Companies Act 2006.
The consultation indicates that the FCA will separately consult on proposals to require listed companies within its listing rules to use the UK SRS. A specific timeframe for when this consultation would be carried out is not given but it is likely that it would occur following endorsement and finalisation of the UK SRS.
2. Transition plan consultation
DESNZ’s consultation on transition plans follows on from the UK Government’s manifesto commitments to:
- require UK-regulated financial institutions and FTSE 100 companies to develop and put in place credible transition plans; and
- consult on implementation mechanisms in 2025.
The transition plans are designed to align business strategies with net zero commitments.
The consultation endorses the recommendations for a good practice transition plan in the Transition Plan Taskforce’s (“TPT”) Disclosure Framework, published October 2023. The TPT, established by HM Treasury in 2022 to promote best practice in transition plan disclosures, developed the Disclosure Framework to help organisations produce robust and credible transition plans. The Framework recommends that plans should include:
- an organisation’s “Strategic Ambition”, described as “its objectives and priorities for responding and contributing to the transition towards a low GHG—emissions, climate resilient economy”;
- whether an organisation is pursuing these objectives and priorities; and
- steps the organisation is taking to harness opportunities while avoiding adverse impacts and protect the environment.
Currently, the requirements are not yet mandatory. However, the consultation considers proposals to make disclosure and implementation of transition plans compulsory for:
- UK regulated financial institutions;
- FTSE 100 companies; and
- other economically significant entities.
For further discussion on transition plans see our previous articles here and here.
3. Sustainability assurance consultation
DBT’s consultation on assurance of sustainability reporting seeks input on the proposed Audit, Reporting and Governance Authority, which would be responsible for creating a regime for the voluntary registration of third-party assurance providers.
This is intended to increase trust in the quality of sustainability assurance providers and enhance investor confidence in sustainability-related financial information.
Next Steps:
All consultations close at 11:59pm on 17 September 2025.
Stakeholders can respond online:
- To the UK SRS consultation here;
- To the transition plan consultation here (or by email to transitionplans@energysecurity.gov.uk); and
- To the quality assurance consultation here.
Stakeholders are encouraged to engage with the consultations, and should consider their readiness to adopt standards and develop credible transition plans. Assurance providers are advised to prepare for potential regulatory oversight.
For further information or assistance please contact the authors or your usual CMS contact.
This article was co-authored by: Stephanie Lodola, Madeleine Lofchy and Oliver Wells.
