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Will Sustainability Reporting Become Mandatory in the UK?

As sustainability becomes key to business success, UK companies must adapt to evolving reporting mandates.
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TLDR: Mandatory regulations like SECR are already in effect for large companies. The upcoming SDR regime aims to enhance transparency in sustainability risks and opportunities. To navigate these changes and align with new standards, FutureTracker offers a comprehensive platform for effective emissions management and sustainability planning.

In the evolving landscape of business and environmental responsibility in the UK, the question of whether sustainability reporting will become mandatory is of great interest. Recent developments suggest a significant shift towards mandatory sustainability and environmental, social, and governance (ESG) reporting for businesses operating within the country.

Mandatory ESG reporting is already a reality for certain segments of the UK's corporate world. As of April 2022, more than 1,300 of the largest UK-registered companies and financial institutions, including traded companies, banks, and insurers, are required to report based on the Task Force on Climate-Related Financial Disclosures (TCFD) framework. This move aims to enhance transparency and accountability in how businesses address climate-related risks and opportunities.

Task Force on Climate-Related Financial Disclosures (TCFD):

  • Who's affected: Over 1,300 large UK-registered companies, including traded companies, banks, and insurers.
  • Requirements: These firms must report on climate-related financial information, focusing on the risks and opportunities presented by climate change.

The UK's Streamlined Energy and Carbon Reporting (SECR) framework, effective since January 2022 for companies listed on the London Stock Exchange, mandates the disclosure of global scope 1 and 2 greenhouse gas (GHG) emissions, energy usage, and emissions reduction initiatives, among other requirements. This "comply or explain" approach is designed to promote greater transparency in environmental impact reporting, offering some flexibility for businesses at different stages of their sustainability journey.

Streamlined Energy and Carbon Reporting (SECR):

  • Scope: Applies to companies listed on the London Stock Exchange.
  • Methodology: Recommended to use recognised standards like the GHG Reporting Protocol or ISO 14064-1:2018.

Key Elements:

  • GHG Emissions: Disclosure of global scope 1 and 2 GHG emissions is mandatory.
  • Emissions Intensity Ratio: At least one ratio must be reported, comparing emissions data with a business metric.
  • Energy Usage: Must include total global energy use.
  • Efficiency Projects: A narrative on main initiatives to improve energy efficiency.

Looking ahead, the UK's Sustainability Disclosure Requirements (SDR) regime is set to introduce more comprehensive sustainability reporting standards. Scheduled to begin implementation in 2024, the SDR will encompass corporate disclosures about sustainability-related risks and opportunities, asset manager and owner disclosures, and product-level sustainability information. This will be underpinned by an overarching framework aiming for consistent disclosure across the value chain. The SDR regime will align with the International Sustainability Standards Board (ISSB) standards and include transition planning disclosure requirements.

Sustainability Disclosure Requirements (SDR):

  • Coming Changes: Set to introduce comprehensive sustainability reporting standards by 2024.


  • Corporate Disclosures: About managing sustainability-related risks and opportunities.
  • Asset Manager/Owner Disclosures: On considering sustainability in investment management.
  • Product-Level Disclosures: For asset managers, regarding the sustainability performance of investments.

These evolving requirements signify a clear trend toward more stringent and comprehensive sustainability reporting in the UK. For businesses looking to navigate this complex and rapidly changing landscape, finding the right partner for their sustainability journey is crucial.

FutureTracker offers a robust platform to empower businesses in their sustainability efforts, providing a suite of tools and expert support to measure, manage, and reduce emissions effectively. With its user-friendly interface, expert-guided strategies, and comprehensive data-driven sustainability initiatives library, FutureTracker is ideally positioned to help businesses meet the upcoming SDR and other sustainability reporting requirements. By choosing FutureTracker, businesses can ensure they not only comply with evolving regulations but also embed sustainable principles into their organisation's DNA, driving positive change and enhancing their sustainability credentials.

If you’d like to learn about how FutureTracker can help your business, book a demo here.

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