Plans to make the UK a leader in sustainable finance capital

In 2024, the Chancellor set out the Government’s vision to grow and enhance the competitiveness of the UK’s financial services sector (known as “the Mansion House package”), and this included an announcement to consult on streamlined sustainability disclosures for economically significant companies to strengthen their focus on social and environmental factors within their corporate governance.

The UK Government has now launched the following three consultations.

Climate-related transition plan requirements

This relates to the Government’s commitment to mandate UK-regulated financial institutions (including banks, asset managers, pension funds and insurers) and FTSE 100 companies to develop and implement credible transition plans which align with the 1.5⁰C goal of the Paris Agreement. The Government is seeking stakeholder views on the role, benefits and use cases of transition planning as well as the options for implementation and how they would sit within other existing policies and frameworks.

New draft UK Sustainability Reporting Standards (SRS)

These are based on the standards published by the International Sustainability Standards Boards (ISSB) (specifically, IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures). It is hoped that the UK SRS will be the foundation of a world-leading sustainable finance governance framework, providing clear, comparable information for investors on sustainability related financial risks and opportunities to enable them to make informed investment decisions. Given international comparability is a priority, in the draft UK SRS the Government have sought to limit divergence from the ISSB standards to the extent possible and the consultation seeks feedback on the minor changes to those standards as well as the costs and benefits of UK SRS. In turn, that will inform decisions about whether economically significant companies should also be required to disclose information in accordance with UK SRS.

Improving assurance over sustainability-related financial disclosures

This consultation follows the Financial Conduct Authority market study which was published in February 2025 and showed demand for increased regulatory oversight of assurance providers. Accordingly, this consultation looks at introducing a voluntary registration regime to be operated by the Audit, Reporting and Governance Authority which recognises providers of assurance services for information disclosed against UK SRS, the European Sustainability Reporting Standards and any jurisdictional standards aligned to the ISSB standards. The aim of this would be increase trust in the UK sustainability assurance market and enable companies to identify assurance providers more easily.

These three consultations will be complemented by a consultation that will focus on streamlining the UK’s current nonfinancial reporting framework under the Companies Act 2006, as announced by the Secretary of State for Business and Trade with the aim of integrating sustainability-related reporting requirements in the structure of the Annual Report whilst removing duplicative or redundant requirements.

Whilst improving governance standards, this is also designed to support the Government’s ambition to achieve a 25% reduction in the administrative costs of regulation for business.