ESG Reporting in the UK: What Businesses Need to Know

ESG reporting in the UK involves the disclosure of information regarding the environmental, social, and governance aspects of a company's operations. "Environmental" refers to a business's impact on the environment; "Social" covers employees, human rights, and other social issues; and "Governance" addresses corporate governance, risk management, and internal controls.

There is no single law in the UK mandating that every company produce a standalone ESG report. Instead, requirements are embedded across various regulations, rules set by regulators, and reporting standards. Consequently, the scope of ESG reporting depends on factors such as company size, status, sector of activity, and other considerations.

Environmental reporting is a key area of ​​focus. Certain quoted companies and large private companies are subject to the Streamlined Energy and Carbon Reporting (SECR) framework, which requires the disclosure of data on energy consumption and greenhouse gas emissions. For large private companies, criteria such as employee headcount, turnover, and balance sheet size are taken into account.

Certain companies are also required to disclose information regarding climate-related risks and opportunities. This involves reporting on how climate change may impact the business, its strategy, its risk profile, and its financial outlook.

The introduction of the UK Sustainability Reporting Standards (UK SRS)—based on the international ISSB standards—marked a significant development in the UK's reporting landscape. UK SRS S1 covers general sustainability-related information, while UK SRS S2 addresses climate-related disclosures. Currently, these standards are available for voluntary adoption, though the Financial Conduct Authority (FCA) is working on mandating their use for certain listed companies.

ESG reporting also encompasses social factors. For instance, large commercial organizations with an annual turnover of £36 million or more that conduct business in the UK are required to publish a Modern Slavery Statement. Employers with 250 or more employees also have specific obligations regarding gender pay gap reporting.

Governance encompasses issues of corporate governance, the functioning of the board of directors, risk management, and internal controls. The UK Corporate Governance Code is of particular importance for listed companies.

Consequently, ESG reporting requirements can vary significantly depending on the company. Before preparing a report, it is advisable to check:

• the company's legal status;
• whether it is a listed or quoted company;
• the number of employees;
• turnover and balance sheet size;
• the nature of its operations;
• energy consumption;
• whether it belongs to the financial sector;
• its corporate group structure.

Depending on these factors, ESG-related disclosures may include data on greenhouse gas emissions, energy consumption, climate risks, sustainability targets, employees, diversity, human rights, the supply chain, corporate governance, and risk management.

Changes expected in 2027 warrant special attention. The UK is gradually transitioning from a system focused primarily on climate-related disclosures to broader sustainability reporting based on ISSB standards. The FCA has proposed applying UK SRS to certain listed companies starting January 1, 2027; however, the final rules were still being finalized at the time this material was prepared.

Therefore, ESG reporting in the UK is not a single, one-size-fits-all report mandatory for every company. Rather, it comprises a complex set of requirements that depend on the specific characteristics of the business.

Companies operating—or planning to operate—in the UK market should determine their ESG reporting obligations, the required scope of information, and the applicable standards well in advance. Antwort Law helps businesses analyze ESG requirements in the UK, identify applicable disclosure obligations, and prepare for changes in the sustainability reporting system.

Lidia Ivanova

International lawyer
Antwort Law