Towards trusted sustainability: What the latest UK consultations mean for you
In June 2025, the UK Government, via the Department for Business and Trade (DBT) and the Department for Energy Security and Net Zero (DESNZ), launched three3 public consultations on sustainability reporting, assurance, and transition plans. These initiatives, parts of the Mansion House of reforms, aim to position the UK as a global leader in sustainable finance by enhancing trust and transparency in sustainability reporting.
Links to the three public consultations:
All consultations close at 11:59pm on 17th September 2025.
UK SRS consultation
The UK Sustainability Reporting Standards (UK SRS) consultation proposes adopting two key standards—UK SRS 1 (general sustainability disclosures) and UK SRS 2 (climate-related disclosures)—based on the ISSB framework. This marks a significant shift in UK corporate reporting, aiming to align with global standards, enhance transparency, and improve investor confidence.
UK SRS will expand on existing SECR and TCFD requirements by mandating more detailed, forward-looking disclosures on sustainability risks, opportunities, and governance. It initially targets economically significant entities and high-emission sectors, with potential future expansion to large private companies and SMEs.
UK SRS 1 requires disclosures on governance, strategy, risk management, and metrics across all sustainability topics. UK SRS 2 focuses specifically on climate-related risks and transition plans aligned with net zero goals. Businesses must embed sustainability into strategic planning and board oversight, supported by credible data and assurance processes.
While implementation may be challenging, UK SRS offers a strategic opportunity to build trust, attract investment, and drive progress toward a low-carbon economy. Verco has recommended to government that a centralised digital platform be established for reporting, to improve accessibility and reduce duplication. We support organisations in navigating these changes by streamlining data, building governance structures, and aligning sustainability with strategic goals.
For an expert review of the UK SRS consultation, read Alex Steene's in-depth article.
Sustainability assurance consultation
The proposed new sustainability assurance oversight regime includes a voluntary registration system for assurance providers, overseen by the Audit, Reporting and Governance Authority (ARGA). Its profession-agnostic approach allows both accounting and non-accounting firms to participate. Providers must demonstrate capability across multiple reporting standards and align with the UK-equivalent standards to ISSA 5000.
The proposed framework will support high-quality assurance of disclosures aligned with standards such as UK SRS, ISSB, and ESRS.
The regime will impact assurance providers, reporting entities, professional bodies, and investors by fostering credibility and consistency in sustainability data.
Verco, with strong carbon accounting and assurance expertise, is actively preparing for the regime through consultation engagement, process alignment, and cross-functional training. We support the government’s direction and are committed to contributing to a fair, inclusive, and high-quality sustainability assurance market.
Find out more about ESG assurance
If you have questions about the assurance process, we invite you to join our upcoming webinar, ESG Assurance – what you need to know, on Tuesday 14th October. During the session, Verco’s assurance experts Jing Wang and Mark Challis will discuss a variety of frequently asked questions, including what assurance really is, how it differs from pre-assurance and verification and which types of standards to assure against.
Transition Plan consultation
The UK Government is currently considering mandating transition plans for major financial institutions, FTSE 100 companies, and large private companies as part of meeting the UK's net zero by 2050 commitment. Large private companies are defined as those meeting two of three Companies Act 2006 thresholds: turnover more than £36 million, balance sheet total more than £18 million, and more than 250 employees. Additionally, the FCA intends to separately consult on disclosure requirements for listed companies. The UK Government’s consultation ends in mid-September 2025, with responses informing implementation routes.
The UK Government’s consultation proposes two pathways for possible regulation:
Option 1 allows organisations to explain why they have not developed and disclosed a transition plan, improving transparency without immediate preparation costs while giving firms time to build capacity. However, if this remains the final approach without evolving into mandatory planning, there's a risk that early preparation efforts may not be fully leveraged and could lead to inconsistency with other regulatory frameworks.
Option 2 requires organisations to develop and disclose transition plans, which strengthens climate resilience and supports investor decision-making, though this approach may increase compliance costs and administrative workload.
These requirements are likely to be implemented from 2026 with transition plans recommended to be updated at least every three years.
How will this affect businesses?
Climate-related transition planning represents a strategic approach for businesses to navigate the shift towards a low-carbon economy while positioning themselves for future success. As the UK Government considers these mandates, organisations are increasingly recognising transition planning as both a regulatory requirement and a business opportunity. Effective transition planning helps companies identify new revenue streams, manage climate-related risks, and demonstrate credibility to investors and stakeholders who are prioritising sustainable business practices.
To get started, we recommend looking at the TPT's disclosure framework which provides a holistic, valuable foundation for most organisations, including seven additional sector-specific guidance documents.
Our recommendations and support
We advocate for full alignment between the UK SRS's adoption of IFRS S2 and the TPT framework, with expanded sector-specific guidance to enable more tailored disclosures while maintaining reporting coherence with existing climate-related disclosure obligations.
While implementation may be complex, the UK Government's transition plan requirements present a strategic opportunity to accelerate climate action, improve market transparency, and support long-term value creation. Climate transition plans offer value beyond compliance, serving as robust tools for strategic planning and risk management.
Smaller companies not subject to mandatory requirements should consider adopting the TPT framework to enhance their strategy development and strengthen their approach to climate-related risks and opportunities. Verco provides strategic guidance to help organisations develop credible, actionable transition plans aligned with UK expectations and global frameworks. We work with clients to integrate transition planning into core strategy, strengthen governance, and ensure disclosures meet investor and regulatory needs.
Find out more about transition plans
If this topic is of interest to you, we recommend our on-demand webinar, Making climate transition plans work. In the session, Verco experts Tim Crozier-Cole and Esther Stoakes provide insights about what a climate transition plan is, who needs to have one and by when, and how to use a transition plan to accelerate progress across the ESG agenda.
To explore how we can support your organisation, please get in touch.
Experts on the topic
