UK Sustainability Reporting Standards (SRS): An opportunity for freight forwarders
Greg Herz, Content Lead
Businesses around the world are grappling with the need to accurately report their carbon emissions due to new regulations. The UK government is set to introduce the UK Sustainability Reporting Standards (SRS) to foster transparency and accountability in reporting sustainability-related risks and opportunities for businesses. For freight forwarders, it is essential to understand how the UK SRS will impact their customers and how to prepare for its implications.
In this blog post, we will explore the UK Sustainability Reporting Standards and explain what it means for freight forwarders and how you can prepare for the changes it will bring to the logistics industry.
What are the UK Sustainability Reporting Standards (SRS)?
The UK Sustainability Reporting Standards (SRS), formally known as the UK Sustainability Disclosure Standards (UK SRS), is a set of corporate sustainability standards due to be announced by the UK government for UK businesses after a consultation process. The initial publication date was set for July 2024 by the UK Department for Business and Trade, but in May 2024, the timeline was extended to Q1 2025. The UK SRS will form the foundation for future sustainability-related legislation and regulations, encompassing risks and opportunities linked to sustainability matters, including climate change.
These standards, underpinned by the International Sustainability Standards Board (ISSB), aim to align sustainability reporting globally. Supported by the UK government, the ISSB endorses the International Financial Reporting Standard (IFRS) S1 and IFRS S2, including scope 3 emissions reporting. This likely means scope 3 reporting, including emissions from supply chain activities, will be a requirement once the UK SRS is introduced.
The UK SRS will be sector-agnostic, impacting all businesses reliant on the movement of goods. For many companies, scope 3 emissions constitute over 80% of their total carbon footprint. The first phase of reporting will target large businesses with greater capacity for sustainability reporting, with SMEs phased in over 2 to 4 years based on company size and sector-specific needs. This approach mirrors the Corporate Sustainability Reporting Directive (CSRD), emphasising the increasing demand for visibility of scope 3 supply chain emissions across sectors reliant on goods movement.
What updates have been made to the UK SRS?
In May 2024, the UK government's Department for Business and Trade (DBT) outlined updates to its plans to incorporate ISSB sustainability reporting standards.
Name Change:
UK Sustainability Disclosure Standards (SDS) were renamed to UK Sustainability Reporting Standards (UK SRS).
Timelines:
Final standards expected in Q1 2025.
Effective for accounting periods from 1 January 2026.
Transition Plans:
Consultation on disclosure methods for large companies in Q2 2024.
FCA to update transition plan disclosure expectations in 2025.
UK Green Taxonomy:
Consultation expected by the end of this year.
Voluntary disclosure testing for at least two years before considering mandatory disclosures.
Nature-Related Disclosures:
UK government encourages ISSB to consider the Taskforce on Nature-related Financial Disclosures (TNFD) approach.
No current plans to integrate TNFD within UK SRS, but likely to follow ISSB decisions.
How can freight forwarders prepare for UK SRS?
Proactively embedding scope 3 carbon reporting capabilities into your TMS or customer portal is the best way to prepare your customers for the UK SRS. Early integration will not only add value to your forwarding service but also allow you to refine data processes and improve the quality of your carbon reporting, retaining your competitive edge once it becomes a standard industry service.
If you'd like to demonstrate your commitment to helping shippers without integrating carbon reporting into your systems, there are also options out there. At Pledge, we've developed a simple solution enabling you to meet your customers' scope 3 carbon reporting requirements without needing extensive integration. By using our platform, you can upload a CSV file with your customers' shipment data, view their emissions and download the necessary reports, saving time and resources.
How can freight forwarders add value through scope 3 carbon reporting?
The UK SRS is likely to mean that shippers will seek freight forwarders equipped to provide scope 3 carbon reporting as a standard service. This requirement presents an opportunity to add value to your business by getting ahead of the competition and increasing revenue. Conversely, not meeting this requirement will impact your ability to remain competitive during the tender process.
Taking early action by integrating carbon reporting capabilities into your TMS or customer portal can provide a distinct advantage. By proactively offering scope 3 carbon reporting, you’ll differentiate your business in the market, attract environmentally conscious customers and foster long-term partnerships.
Help shippers meet carbon reporting requirements with Pledge
The UK Sustainability Reporting Standards offer a unique chance to contribute to global sustainability while adding significant value to your services. Demonstrating your readiness to help shippers meet their reporting obligations positions your business as a trusted partner, gaining a competitive edge in the evolving marketplace and leading to increased revenue and customer loyalty.
At Pledge, we’ve built a platform to make it easy for freight forwarders to add scope 3 carbon reporting to their services. Sign up for a 14-day free trial to see how we can enhance your forwarding service and support your shippers' carbon reporting needs.This blog post was previously titled “What are the UK Sustainability Disclosure Standards?” but has been updated to reflect the UK government's alterations to the UK Sustainability Disclosure Standards (now UK Sustainability Reporting Standards).