ESG reporting for accountants: a UK guide to standards, frameworks, and advisory

Published Thursday 11 June 2026

Table of contents

• Why is ESG reporting important for accounting practices?
• UK ESG reporting requirements
• UK Sustainability Reporting Standards (UK SRS)
• ESG accounting standards and frameworks
• Challenges in ESG reporting and how to overcome them
• How accountants can support clients with ESG reporting
• How software and automation transform ESG reporting
• Strengthen your ESG advisory services with Xero
• FAQs on ESG reporting

Key takeaways

• The UK published its Sustainability Reporting Standards (UK SRS) S1 and S2 on 25 February 2026 for voluntary use, with the Financial Conduct Authority (FCA) proposing mandatory UK SRS S2 adoption for listed companies from 1 January 2027.
• Accountants and bookkeepers are well positioned to deliver ESG advisory services, applying existing data collection, analysis, and reporting skills to sustainability disclosures.
• A new assurance framework, International Standard on Sustainability Assurance (UK) 5000, takes effect on 15 December 2026, creating opportunities for practices to offer sustainability assurance alongside traditional audit work.
• Cloud accounting tools like Xero help practices automate data gathering and reporting, freeing up capacity to focus on higher-value ESG advisory for clients.

Why is ESG reporting important for accounting practices?

Environmental, Social, and Governance (ESG) reporting has moved from a voluntary exercise to a regulatory expectation for a growing number of UK businesses. For accounting practices, this shift represents both a compliance obligation to understand and a significant advisory opportunity.

Investors increasingly prioritise companies that demonstrate sustainable operations and transparent reporting. Meanwhile, the next generation of employees actively seeks out employers that take sustainability seriously. These pressures mean your clients, regardless of size, need clear guidance on what to report and how.

The skills you already use for financial reporting transfer directly to ESG: data gathering, analysis, compliance checking, and strategic interpretation. Just as you support clients with their financial growth, you can apply the same processes to sustainability accounting. Building ESG capability extends the advisory services your clients already rely on you for.

UK ESG reporting requirements

The UK regulatory landscape for sustainability reporting has evolved significantly. Understanding the current requirements and upcoming changes helps you advise clients on what applies to them now and what to prepare for.

Existing requirements

Several reporting obligations are already in force for larger organisations.

• Streamlined Energy and Carbon Reporting (SECR). Since April 2019, large companies and Limited Liability Partnerships (LLPs) have been required to report on annual energy use, greenhouse gas emissions, and energy efficiency measures taken.
• Task Force on Climate-related Financial Disclosures (TCFD). Since April 2022, companies with turnover above £500 million and 500 or more employees must make climate-related financial disclosures. The International Sustainability Standards Board (ISSB) has now subsumed TCFD, so companies should transition to UK SRS S2.
• Companies Act strategic report. Large companies must include a section 172 statement in their strategic report, covering how directors considered stakeholder interests, including environmental matters.

What's ahead

The regulatory direction is clear: more companies will need to report, and reporting standards are becoming more specific. The publication of UK SRS in February 2026 marked a turning point, giving UK businesses their own domestic sustainability reporting framework for the first time.

The Financial Conduct Authority (FCA) published consultation paper CP26/5. It proposes making UK SRS S2 mandatory for listed companies from 1 January 2027. UK SRS S1 (general sustainability disclosures) is proposed on a comply-or-explain basis from 1 January 2029. Even if your clients fall outside these initial thresholds, voluntary adoption signals credibility to investors, lenders, and supply chain partners.

UK Sustainability Reporting Standards (UK SRS)

The UK government published its own Sustainability Reporting Standards on 25 February 2026. These represent the most significant development in UK sustainability reporting to date.

What UK SRS covers

UK SRS comprises two standards built on the ISSB's global baseline. UK SRS S1 sets out the overall framework for disclosing sustainability-related financial information. It covers governance, strategy, risk management, and metrics and targets across all sustainability topics. UK SRS S2 focuses specifically on climate risks and opportunities, including physical risks, transition risks, greenhouse gas emissions, and climate resilience planning.

The FCA has set out a phased timeline for when these standards will become mandatory.

Proposed mandatory timeline

The FCA's CP26/5 consultation proposes a phased approach. UK SRS S2 would become mandatory for UK-listed companies from 1 January 2027. UK SRS S1 would then apply on a comply-or-explain basis from 1 January 2029.

While the standards are currently available for voluntary use, early adoption gives your practice and your clients a head start on compliance. It also positions you as a knowledgeable adviser when these requirements become binding.

Relationship to ISSB and IFRS sustainability standards

UK SRS S1 and S2 are closely based on IFRS S1 and IFRS S2 from the ISSB. The ISSB developed these as a global baseline for sustainability disclosures, and the UK standards adopt this baseline with UK-specific modifications. If your clients operate internationally, understanding both the ISSB originals and UK SRS adaptations helps you advise on cross-border reporting.

ESG accounting standards and frameworks

Alongside UK SRS, several global frameworks and standards remain relevant. Knowing which applies to each client depends on their size, sector, listing status, and international operations.

• ISSB (IFRS S1 and S2). The International Sustainability Standards Board sets the global baseline for sustainability-related financial disclosures. UK SRS builds directly on these standards.
• Sustainability Accounting Standards Board (SASB) standards.SASB provides industry-specific metrics for sustainability risks and opportunities that affect financial performance. These standards are used by over 3,200 companies across more than 80 jurisdictions.
• Global Reporting Initiative (GRI).GRI standards focus on an organisation's broader impact on the economy, environment, and people. GRI uses a double materiality approach, covering how sustainability issues affect the organisation and vice versa.
• TCFD. The Task Force on Climate-related Financial Disclosures provided a framework for assessing climate risks and opportunities. The ISSB has now taken over TCFD monitoring responsibilities, and companies should transition to IFRS S2 or UK SRS S2 for future reporting.

Your clients may need to use a combination of these, depending on their circumstances. Helping them identify which frameworks apply, and how they interact, is a valuable advisory service in itself.

Challenges in ESG reporting and how to overcome them

ESG reporting introduces practical challenges that differ from traditional financial reporting. Getting ahead of these helps you deliver a smoother experience for clients.

• Data gathering across the business. ESG data comes from departments that may not have structured reporting processes. Energy usage, supply chain information, workforce diversity metrics, and community impact data all need collecting, often in inconsistent formats. Setting up a centralised data collection system early saves time later.
• Navigating multiple frameworks. Your clients may need to report against several standards simultaneously. Spending time upfront to map requirements across frameworks helps avoid duplication and ensures nothing is missed.
• Keeping pace with regulation. UK and global ESG regulations are evolving rapidly. What's voluntary today may become mandatory soon. Building a practice-wide process for tracking regulatory changes keeps you and your clients prepared.
• Resource and capacity constraints. ESG reports are detailed documents. Manual data gathering and analysis take significant time. Automating where possible, particularly data collection and calculations, frees your team to focus on interpretation and advisory.

How accountants can support clients with ESG reporting

Your existing expertise in data, compliance, and strategic reporting gives you a strong foundation for ESG advisory. Here are practical ways to build this capability within your practice.

1. Assess client readiness

Start by understanding which of your clients are already subject to ESG reporting requirements and which will be affected as regulations expand. Map their current data collection processes and identify gaps against the relevant standards.

2. Build internal expertise

Invest in ESG training and professional development for your team. Professional bodies offer ESG-focused continuing professional development (CPD) courses. The Association of Chartered Certified Accountants (ACCA) and the Institute of Chartered Accountants in England and Wales (ICAEW) are good starting points. Designating ESG leads within your practice creates focused expertise. Explore how AI in accounting can also support your practice development.

3. Establish data workflows

Help clients set up repeatable processes for collecting ESG data. This includes identifying data sources, agreeing on collection frequency, and establishing quality checks. The more structured the process, the easier annual reporting becomes.

4. Deliver reporting and interpretation

Use your analytical skills to turn raw ESG data into meaningful disclosures. Go beyond compliance by helping clients understand what their ESG metrics reveal about operational risks and opportunities. This is where your advisory value is highest.

5. Prepare for sustainability assurance

The International Standard on Sustainability Assurance (UK) 5000, or ISSA (UK) 5000, takes effect on 15 December 2026. This creates a formal framework for providing assurance over sustainability information, similar to financial audit. The Financial Reporting Council (FRC) is establishing an interim register of sustainability assurance practitioners. Practices that prepare early will be well placed to offer this service.

How software and automation transform ESG reporting

Reliable ESG reporting depends on accurate, consistent data. Cloud accounting software helps you and your clients gather, organise, and report on that data without relying on manual processes.

• Automated data aggregation. Modern software brings financial and operational data together in one place, reducing the manual effort of compiling information from multiple sources.
• Carbon footprint calculations. Tools like Zero Carbon use expenditure data already in your accounting software to calculate your client's carbon footprint automatically.
• ESG metrics and visualisations. Apps like Spotlight Sustain let you measure energy use, workforce diversity, and other ESG metrics, then present them in clear visual reports for clients and stakeholders.
• Scalable processes. Once you've set up an ESG reporting workflow using software, you can apply it across your client base. This makes ESG advisory a scalable service rather than a one-off project for each client.

Xero's built-in reporting features draw on financial data already in the platform, giving you a foundation for accurate client reports. Combined with ESG-specific apps from the Xero App Store, you can build a complete sustainability reporting toolkit for your practice. Find out what's available at Xero's sustainability page.

Strengthen your ESG advisory services with Xero

ESG reporting is becoming a core part of accounting practice. Your clients need accurate data, clear reporting, and strategic guidance, and you have the skills to deliver all three. The right tools make it easier to build ESG advisory into your existing workflow.

The Xero Partner Programme gives you access to Xero HQ, ESG-focused app integrations, and support resources. As your practice grows, you unlock additional tools at each partner tier, including Xero Practice Manager at silver and above.

Join the partner programme to access the tools and support you need.

FAQs on ESG reporting

Here are answers to frequently asked questions about ESG reporting for accountants and bookkeepers in the UK.

What are the UK ESG reporting requirements for 2026?

UK SRS S1 and S2 were published on 25 February 2026 for voluntary adoption. The FCA has proposed making UK SRS S2 mandatory for listed companies from 1 January 2027. Existing requirements under SECR (since April 2019) and TCFD-aligned disclosures (since April 2022) continue to apply to qualifying large companies and LLPs.

What is the difference between TCFD and UK SRS?

The TCFD provided a framework for climate-related financial disclosures, and its recommendations have now been subsumed by the ISSB. UK SRS S2 builds on this foundation, incorporating ISSB IFRS S2 with UK-specific adaptations. Companies currently reporting under TCFD should plan to transition to UK SRS S2.

How can accountants help clients with ESG reporting?

You can support clients by assessing their reporting obligations and setting up data collection workflows. From there, prepare disclosures against the relevant standards and interpret ESG metrics to inform strategy. As ISSA (UK) 5000 takes effect in December 2026, practices can also prepare to offer sustainability assurance services.

What frameworks are used for ESG reporting in the UK?

The main frameworks include UK SRS S1 and S2, ISSB IFRS S1 and S2, SASB, and GRI. Which one applies depends on your client's size, sector, and listing status.

When does ESG reporting become mandatory in the UK?

SECR and TCFD-aligned disclosures are already mandatory for qualifying large companies. The FCA's CP26/5 proposes mandatory UK SRS S2 for listed companies from 1 January 2027. UK SRS S1 would follow on a comply-or-explain basis from 1 January 2029. Voluntary adoption is available now.