The UK has taken a major step forward in sustainability regulation with the publication of the UK Sustainability Reporting Standards (UK SRS) on 25 February 2026. Aligned with the global ISSB framework, the standards are designed to ensure companies disclose material sustainability information in a simple, consistent and useful way. As the standards themselves put it, they “provide guidance to companies to ensure they are disclosing material sustainability information in a consistent manner.”
For the UK’s food and drink sector, this shift is particularly significant. From agricultural supply chains and energy‑intensive processing to packaging, logistics, and waste, the sector faces some of the most complex sustainability risks and some of the biggest opportunities. The UK SRS brings these issues into sharper financial focus and raises the bar for how companies assess, govern, and report on them.
What are the UK Sustainability Reporting Standards?
The UK SRS consists of two connected standards:
- UK SRS S1 – General Requirements
Covers all sustainability‑related risks and opportunities that could affect a company’s financial prospects.
- UK SRS S2 – Climate‑Related Disclosures
Focuses specifically on climate risks, including physical risks (e.g., heat stress, flooding) and transition risks (e.g., carbon pricing, regulatory shifts).
For food and drink businesses, both standards are highly relevant, from climate‑impacted crop yields to energy‑intensive refrigeration, packaging materials, and supply chain resilience.
Who needs to comply and when?
The current compliance timeline:
- UK listed companies – mandatory from 1 January 2027
- Large private UK companies – expected to be brought into scope, but timing still to be confirmed.
- Any entity – voluntary reporting available from 25 February 2026
For food and drink businesses, especially manufacturers, processors, and major brands early preparation is strongly recommended. Companies should begin preparing to give them enough time to establish robust sustainability data collection, governance structures and internal reporting processes.
Why the UK SRS matters for food & drink businesses
Food and drink is one of the UK’s most exposed sectors when it comes to sustainability‑related risks:
- Climate impacts on agriculture – Heatwaves, flooding, water scarcity, and shifting growing seasons directly affect ingredient availability and cost.
- High energy use – Cold storage, processing, and transport are energy‑intensive, making climate‑related transition risks (e.g., carbon pricing, energy volatility) financially material.
- Packaging and waste – Packaging regulations, recycling requirements, and consumer expectations continue to tighten.
- Complex supply chains – Food and drink supply chains span multiple geographies and risk categories, making governance, traceability, and risk management essential.
- Scope 3 emissions – Agriculture, logistics, packaging, and waste all contribute to Scope 3 emissions which, under UK SRS, must be disclosed on a comply‑or‑explain basis.
The UK SRS brings all of these into sharper financial focus.
Key requirements translated for food & drink organisations
- Materiality Assessment
Under the UK SRS, materiality becomes a more rigorous and financially grounded exercise. Food and drink companies must identify sustainability‑related risks and opportunities that could reasonably be expected to affect their financial prospects. This requires a deeper understanding of issues such as supply chain disruption, rising compliance costs, raw material scarcity, and changing consumer expectations.
Because the UK SRS uses single (financial) materiality, most organisations will need to revisit and update their materiality assessments. The focus is no longer on broad ESG themes but on pinpointing which sustainability issues could genuinely influence margins, cost of goods sold, investment decisions, or long‑term resilience. For many businesses, this will mean redoing their materiality assessment entirely and aligning it with the new requirements.
- Governance
Governance under the UK SRS is about demonstrating real oversight and accountability. Food and drink businesses must explain how sustainability risks, particularly climate and supply chain risks, are monitored and overseen at senior levels. This includes clear board‑level responsibility and a transparent description of how sustainability is integrated into relevant management committees.
Crucially, companies must also explain how these committees consider and address climate‑related risks in practice. That might involve procurement teams assessing supplier exposure to climate impacts, or operations teams reviewing the resilience of cold‑chain infrastructure. The emphasis is on showing that sustainability is embedded into governance processes, not treated as a separate or optional activity.
- Strategy
The strategy section introduces one of the most significant changes under the UK SRS. Companies must now quantify sustainability‑related risks and show how these quantifications influence strategic and financial planning. This means demonstrating clear links between sustainability risks and areas such as cash flows, asset valuations, and capital expenditure.
For food and drink businesses, this could involve modelling how climate‑driven crop shortages might affect cost of goods sold, assessing the investment required to decarbonise refrigeration or transport fleets, or explaining how much capital expenditure is being directed towards the net zero transition. It also includes understanding how packaging regulation or waste‑related obligations could reshape long‑term financial plans. The UK SRS expects companies to connect sustainability and finance in a way that is explicit, quantified, and integrated.
- Risk Management
Risk management must show how sustainability‑related risks are identified, assessed, and managed within the company’s existing enterprise risk processes. For food and drink businesses, this includes both physical climate risks such as heat stress, flooding, or water scarcity and transition risks like carbon pricing, energy volatility, or regulatory change.
The UK SRS only requires companies to disclose a transition plan if they already have one. However, if a transition plan does exist, it must be integrated into the same financial assumptions and planning processes described above. Sustainability risks can no longer sit outside the core risk framework; they must be treated as part of the organisation’s overall risk landscape.
- Metrics & Targets
Finally, companies must report on the metrics and targets they use to manage their material sustainability risks. This may involve developing new targets in areas newly identified as material or aligning existing targets with other reporting schemes to ensure consistency.
For food and drink businesses, this often includes metrics related to energy use, emissions across Scopes 1, 2 and material Scope 3, packaging and waste, water use, and exposure to physical climate risks. The emphasis is on clarity, accuracy, and the ability to demonstrate progress over time supported by data systems that are robust enough to withstand audit scrutiny.
What food & drink businesses should do now
Food and drink organisations should begin by revisiting their materiality assessment and ensuring it aligns with the UK SRS. Strengthening governance structures, improving data systems, and building the capability to quantify financial impacts will also be essential. Companies with transition plans should review them to ensure they are integrated into financial planning, while those without may wish to consider whether developing one would support investor confidence.
Importantly, UK SRS disclosures must be integrated into the annual report, not published as a standalone sustainability report. This will require closer collaboration between sustainability, finance, operations, and procurement teams.
UK SRS is a challenge but also an opportunity
For food and drink businesses, the UK SRS is more than a compliance exercise. It is an opportunity to strengthen supply chain resilience, reduce operational costs, improve investor confidence, and build a future‑proof sustainability strategy. The companies that act early will be best positioned to lead.
Achieve Goal 12 is already supporting food and drink businesses through this transition from materiality assessments and gap analysis to data readiness, governance design, and reporting alignment. If you’d like to explore what this means for your organisation, we’re here to help.
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