Sustainability Disclosure Requirements (SDR)

Sustainability Disclosure Requirements (SDR): the uk's future unified ifrs s1/s2-aligned reporting and anti-greenwashing regime, with mandatory scope 1 and 2 emissions disclosure.

Jurisdiction
uk
Status
pending
Category
First deadline
FY2026 anticipated first mandatory reporting period (first reports published 2027, subject to confirmation)
Who must comply
Applies to all premium-listed companies on the London Stock Exchange, large asset managers and institutional investors under FCA supervision, and other FCA-regulated firms including financial advisers, pension providers and investment product distributors.
Penalties
Financial penalties for misreporting or failure to disclose, public censure statements, suspension or restriction of regulated activities for material noncompliance, and enforcement of the anti-greenwashing rule already in effect since 2024.

What it is

The UK's Sustainability Disclosure Requirements (SDR) are the UK's future unified framework for sustainability reporting, overseen by the Financial Conduct Authority (FCA) and Financial Reporting Council (FRC) and rooted in the UK Green Finance Strategy.

It aims to enhance transparency, prevent greenwashing and align financial reporting with climate and broader ESG objectives, building on IFRS S1 and S2 and remaining pending FCA rule-making.

Who must comply

Applies to all premium-listed companies on the London Stock Exchange, large asset managers and institutional investors under FCA supervision, and other FCA-regulated firms such as financial advisers, pension providers and investment product distributors.

What you must disclose

Under IFRS S1, entities disclose governance, strategy and risk management of sustainability issues, material ESG topics, and key metrics and targets. Under IFRS S2, they disclose mandatory Scope 1 and 2 GHG emissions, material Scope 3 where applicable, and climate risks, opportunities, transition plans and scenario analysis in a TCFD-aligned structure, reported in annual reports accessible to investors and the public.

Timeline

Introduced as a policy commitment in 2024 under the UK Green Finance Strategy, and pending FCA rule-making.

The FRC endorsed IFRS S1 and S2 in Q1 2025, with the FCA drafting and consulting on rules during 2025. FY2026 is the anticipated first mandatory reporting period, with first reports published in 2027 subject to confirmation.

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