🌍 UK Climate Disclosures: How SRS S2 Makes Measurement Matter

As the UK strengthens its position on sustainable finance, UK climate disclosures are becoming a central focus for businesses and regulators alike. At the heart of this shift is the proposed UK Sustainability Reporting Standard S2 (UK SRS S2) — a climate-focused disclosure standard designed to bring clarity, consistency, and credibility to how organisations report their climate-related risks and opportunities.

But beyond compliance, UK SRS S2 is a call to action: to measure what matters, so we can manage what matters.

📊 What Is UK SRS S2?

UK SRS S2 is the UK’s adaptation of the IFRS S2 Climate-related Disclosures standard, developed by the International Sustainability Standards Board (ISSB). It requires entities to disclose:

• Governance of climate-related risks and opportunities
• Strategic impacts of climate change on the business
• Risk management processes
• Metrics and targets — including greenhouse gas (GHG) emissions, climate-related financial impacts, and progress toward climate goals

These disclosures are structured around the TCFD’s four pillars: Governance, Strategy, Risk Management, and Metrics & Targets.

🎯 Why Metrics and Targets Matter

Metrics and targets are the backbone of UK SRS S2. They transform climate ambition into measurable action. Without them, climate strategies remain vague aspirations. With them, they become accountable, trackable, and improvable.

Key Metrics Required:

• Scope 1, 2, and 3 GHG emissions
• Financed emissions (for financial institutions)
• Carbon credit usage
• Internal carbon pricing
• Capital deployment toward climate initiatives
• Executive remuneration linked to climate performance

These metrics are not just numbers, they are signals to investors, regulators, and the public about how seriously an organisation is taking its climate responsibilities.

📈 From Data to Decisions

UK SRS S2 doesn’t just ask for data, it asks for decision-useful data. That means:

• Quantifying the financial impact of climate risks
• Disclosing scenario analyses to test resilience
• Reporting on progress toward net-zero targets

This level of transparency empowers stakeholders to assess how well a company is positioned for the transition to a low-carbon economy.

🧭 The Role of Measurement in Climate Strategy

As the saying goes, “you can’t manage what you don’t measure.” UK SRS S2 makes measurement mandatory — not just for emissions, but for the effectiveness of climate strategies. It ensures that climate-related goals are not just set, but pursued with rigour and reported with integrity.

By embedding metrics and targets into the core of sustainability reporting, UK SRS S2 helps organisations:

• Identify and mitigate climate risks
• Unlock green investment
• Build trust with stakeholders
• Drive continuous improvement

🛠️ What’s Next?

The UK government is currently consulting on the draft UK SRS S2, with final standards expected in autumn 2025. Initially voluntary, these standards may become mandatory for listed and economically significant companies in the near future.

Now is the time for organisations to prepare by strengthening their data systems, aligning internal processes, and embedding climate metrics into strategic decision-making.

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In short: UK SRS S2 is more than a reporting requirement. It’s a roadmap for credible climate action. And it starts with measurement.