UK Government Consults on Sustainability Reporting Standards and Climate Transition Planning

On 25 June 2025, the UK government launched three consultations as part of London Climate Action Week, which are intended to form key parts of the government’s programme to make the UK the “sustainable finance capital of the world”.

The three consultations focus on:

1. progressing the government’s commitment on transition planning and supporting the market to invest in sectors that will deliver the clean energy superpower mission;
2. new UK Sustainability Reporting Standards to provide clear, comparable information for investors on sustainability-related financial risks and opportunities, enabling them to make informed investment decisions; and
3. developing a voluntary registration regime for the providers of assurance of sustainability reporting, supporting growth in this important sector.

Below, we set out the plans suggested in each consultation, as well as the next steps in the process.

Transition Plan Implementation

In the Chancellor’s November 2024 speech, the government announced a policy intention to require mandatory 1.5C-aligned climate transition plans for FTSE 100-listed companies and UK-regulated financial institutions. 

The first consultation seeks views on how the government can move forward with this commitment while leveraging the existing work that has been done by bodies such as the Transition Plan Taskforce (TPT). The TPT issued its disclosure framework in October 2023 and has subsequently been amalgamated into the International Sustainability Standards Board (ISSB).

Sustainability Reporting Standards (SRS)

The second consultation relates to the UK’s proposed corporate sustainability disclosure standards, the SRS. It seeks views on exposure draft SRS, which are based on IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures, with six minor amendments.

Standards IFRS S1 and IFRS S2 have been developed by the ISSB for the purposes of establishing a globally applicable sustainability disclosure standard for corporate entities. The UK had previously committed to incorporating the ISSB standards into its own domestic disclosure framework, alongside other jurisdictions that include Australia, Costa Rica, and Turkey.

The consultation also seeks evidence on the costs and benefits of using the SRS, which the government says will inform future decisions regarding mandatory requirements for entities to report information based on the standards.

Notably, the UK already mandates a number of different sustainability-related reporting standards for certain entities. Therefore, how any decisions in the context of the SRS will impact those sustainability reporting regimes remains uncertain. The consultation plans to eliminate duplication between the existing and new frameworks, and so the existing reporting standards could be merged into the SRS regime.

Assurance of Sustainability Reporting

The third consultation seeks views on whether the government’s planned Audit, Reporting and Governance Authority (ARGA) should be given responsibility for creating a voluntary registration regime for entities that offer third-party assurance services for sustainability-related disclosures. 

Sustainability reporting in other jurisdictions (e.g., under the EU’s Corporate Sustainability Reporting Directive (CSRD)) is already subject to requirements relating to assurance, and the government notes in the consultation that a high-quality and competitive assurance market is critical to the success of sustainability reporting. 

Next Steps

The three consultations will close on 17 September 2025, with the responses informing upcoming drafts of the relevant UK legislative decisions. 

Latham & Watkins will continue to monitor developments in relation to the UK’s sustainable finance landscape, including in relation to sustainability reporting standards, and will publish further insights in relation to these consultations.