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Environmental Legislation UK – What you need to know

Discover key UK environmental laws like SECR, ISSB, and CSRD. Learn compliance strategies to meet ESG goals, reduce emissions, and drive sustainable growth.
Environmental Legislation UK
Category
Blog
Last updated
July 03, 2025

In response to escalating climate concerns, significant regulatory changes are reshaping the landscape for environmental, social, and governance (ESG) and climate-related disclosures. The UK, European Union (EU), and United States are introducing robust frameworks, supported by a comprehensive legal framework that underpins environmental legislation, aimed at addressing climate change, as well as major environmental issues such as pollution and biodiversity loss, promoting environmental protection, and achieving net-zero targets by 2050. These climate concerns are closely linked to environmental issues that drive regulatory change.

This guide focuses on key UK-specific legislation, explaining what it means for businesses, who it applies to, and how to ensure compliance. Government policies play a crucial role in shaping the development and enforcement of environmental legislation.

The Environment Act 2021

The Environment Act 2021 (one of the key acts as formal legislative instruments) stands as a landmark in UK environmental legislation, setting ambitious new targets and policies to safeguard the environment. Central to the Act is the commitment to reduce greenhouse gas emissions to net zero by 2050, a crucial step in addressing climate change. The Act also introduces a suite of new environmental targets aimed at improving air and water quality, including legally binding air quality and clean air targets, protecting biodiversity with a focus on pollution control and minimizing adverse effects on the environment, and enhancing waste management through provisions that safeguard public health.

To oversee the implementation of these policies, the Act established the Office for Environmental Protection (OEP). This independent body is empowered to investigate and enforce environmental laws. The Act sets out enforcement mechanisms, including compliance monitoring and penalties, to ensure that environmental standards are upheld and legal obligations are met, ensuring compliance and providing expert advice to the government and other stakeholders. The Environment Act 2021 thus represents a comprehensive framework for environmental protection and sustainable development in the UK, helping to protect both the environment and public health.

Streamlined Energy and Carbon Reporting (SECR)

What is SECR?

Streamlined Energy and Carbon Reporting (SECR) was introduced by the UK government in April 2019 to simplify energy usage and carbon emissions disclosures for businesses. It builds on the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme and Mandatory Greenhouse Gas Reporting (MGHG) regulations. The SECR framework enhances transparency, encourages energy efficiency, and aligns UK companies with national environmental targets.

Who does SECR apply to?

SECR applies to:

  • Quoted companies incorporated in the UK.
  • Large UK private companies and Limited Liability Partnerships (LLPs) meeting two of the following criteria:
    • Turnover of £36 million or more.
    • Balance sheet total of £18 million or more.
    • 250 or more employees.

Public authorities such as NHS Trusts and local authorities are exempt but may face similar obligations under other environmental laws. Companies using less than 40 MWh of energy annually are also exempt.

What are the SECR reporting obligations?

Under SECR, companies must include energy consumption, greenhouse gas (GHG) emissions, and energy efficiency measures in their annual reports.

For quoted companies, the requirements include:

  • Scope 1 and Scope 2 GHG emissions globally.
  • Global energy use and GHG intensity ratios.
  • Energy efficiency projects undertaken.

For large unquoted companies and LLPs, the requirements focus on:

  • Domestic Scope 1 and 2 emissions.
  • Energy intensity metrics.
  • Energy efficiency initiatives.

What’s the timeline for SECR?

SECR reporting began on April 1, 2019. Companies must report annually, aligning with their financial year. If your reporting year is April to March, your next report must cover that period.

Why is SECR important?

SECR supports the UK’s environmental targets by fostering accountability and encouraging companies to tackle climate change through energy efficiency and carbon reduction measures. Reporting also enhances corporate transparency, making businesses more attractive to investors prioritizing ESG criteria.

The UK Sustainability Disclosure Standards (UK SRS)

What are the UK SRS?

The UK Sustainability Reporting Standards (UK SRS) are a forthcoming set of corporate reporting requirements designed to improve the quality, consistency, and comparability of sustainability disclosures. Based on the International Sustainability Standards Board (ISSB)’s global baseline—IFRS S1 and S2—the UK SRS aims to align with international best practices while incorporating UK-specific amendments.

The standards focus on disclosing material sustainability-related risks and opportunities, including climate-related impacts, governance structures, and emissions data, all closely linked to a company’s financial reporting.

Who do the UK SRS apply to?

Initially, the UK SRS is expected to apply to UK-listed companies, particularly those already subject to TCFD-aligned reporting requirements.

Over time, the scope may expand to include large private companies, financial institutions, and public interest entities. Businesses with significant economic influence or exposure to material sustainability risks—such as in energy, construction, or transport—are also likely to be in scope. The government is currently consulting on how widely to apply the standards across sectors and entity types.

What is the timeline for implementation?

Exposure drafts of UK SRS S1 and S2 were published in June 2025, with public consultation open until September 17, 2025. Finalised standards are expected later in the year. While the official adoption timeline will depend on the outcome of the consultation, implementation is likely to begin for financial years starting in 2026 or early 2027.

The Financial Reporting Council (FRC) will oversee the endorsement process and support businesses in transitioning to the new requirements.

Why are the UK SRS important?

The UK SRS marks a significant step in aligning national sustainability reporting with global standards while addressing domestic priorities. By adopting the ISSB’s framework, the UK is supporting investor demands for clear, comparable ESG data and promoting greater corporate accountability on climate and sustainability issues.

Sustainable Disclosure Regulation (SDR)

What is the SDR?

The UK’s Sustainable Disclosure Regulation (SDR) aims to enhance transparency in sustainable investments. Managed by the Financial Conduct Authority (FCA), it applies to investment managers and issuers of bonds and shares listed on UK-regulated markets.

Who does the SDR apply to?

The SDR covers:

  • Firms managing retail investment products.
  • UK UCITS Management Companies, UK AIFMs, and UK MiFID firms.
  • Distributors like platforms and financial advisers.

What are the SDR reporting obligations?

The SDR requires:

  • Entity-level disclosures for firms managing over £5 billion in assets under management (AUM).
  • Sustainable investment labels indicating the environmental or social objectives of investment products.
  • Product-level sustainability disclosures detailing objectives, performance, and key metrics.

Why is the SDR important?

The SDR combats greenwashing by enforcing stringent disclosure standards and clear labelling rules. For businesses, compliance demonstrates a commitment to sustainability and builds trust with investors.

The Corporate Sustainability Reporting Directive (CSRD)

What is the CSRD?

The Corporate Sustainability Reporting Directive (CSRD) is an EU regulation that mandates detailed sustainability disclosures for large and listed companies. It aims to enhance transparency, align corporate strategies with environmental principles, and drive sustainable business practices.

Who does the CSRD apply to?

The CSRD applies to:

  • Large EU-based companies with over 250 employees, €50 million in turnover, or €25 million in assets.
  • Non-EU companies with substantial operations in the EU.

What are the CSRD reporting obligations?

Under the CSRD, companies must:

  • Conduct double materiality assessments, evaluating the impact of their operations on the natural environment, including the assessment of environmental impacts as part of the reporting process, and the financial implications of sustainability issues.
  • Set legally binding environmental targets and report progress annually.
  • Disclose governance, strategy, and risk management practices related to ESG issues.

Why is the CSRD important?

The CSRD aligns with the EU’s environmental laws and climate strategies, ensuring businesses contribute meaningfully to tackling climate change and protecting the natural environment. It also regulates oil and gas activities, emphasizing their relevance in environmental protection regulations, licensing requirements, and compliance measures to safeguard marine habitats and species.

How to prepare for compliance

To meet these diverse regulatory requirements, businesses should comply with pollution prevention and control measures in oil and gas production, as compliance requirements may affect business operations:

  1. Build cross-functional teams: Involve CSR leads, finance, and IT teams in developing a unified sustainability strategy.
  2. Invest in robust data systems: Ensure accurate, consistent, and traceable ESG data collection.
  3. Align with multiple frameworks: Where possible, integrate reporting obligations across SECR, ISSB, SDR, and CSRD to streamline processes.
  4. Engage with stakeholders: Collaborate with suppliers, investors, public authorities, and organisations involved in environmental compliance to align goals and expectations. Additionally, engage with local communities in environmental initiatives.

Understanding country-specific regulations is crucial, as legal frameworks and compliance requirements can vary significantly between jurisdictions.

For further information on compliance, visit official government or regulatory websites.

How ESG software can help with reporting and compliance

Here’s how ESG software supports effective reporting and compliance:

  • Centralises data across departments and systems to create a single source of truth for ESG metrics, including carbon emissions, energy use, and waste management.
  • Automates data collection and calculation processes, reducing manual effort and increasing the accuracy of disclosures.
  • Aligns reporting with key frameworks and regulations such as CSRD, UK SRS, SECR, and ISSB—ensuring businesses are always reporting in line with evolving standards.
  • Tracks performance over time and provides insights into progress on key sustainability targets, including initiatives to reduce emissions and improve resource efficiency.
  • Identifies hotspots across the value chain—such as excessive waste or high carbon emissions—to help companies prioritise action where it matters most.
  • Supports transparency by producing audit-ready reports that can be shared with investors, regulators, and stakeholders.

When properly implemented, ESG software doesn’t just ensure compliance—it empowers businesses to lead on sustainability and protect the environment through smarter, data-driven decisions.

UK environmental legislation – A collective effort

Environmental legislation in the UK and beyond is rapidly evolving to address climate change, promote environmental protection, and achieve sustainability goals. Businesses must proactively adapt to these changes, treating compliance not as a burden but as an opportunity to enhance transparency, build trust, and drive long-term value. By aligning with frameworks like SECR, ISSB, SDR, and CSRD, companies can ensure they meet their reporting obligations while contributing meaningfully to a more sustainable future.

Sweep can help

Sweep is a carbon and ESG management platform that empowers businesses to meet their sustainability goals.

Using our platform, you can:

  • Conduct a thorough assessment of your carbon footprint.
  • Get a real-time overview of your supply chain and ensure that your suppliers meet your sustainability targets.
  • Reach full compliance with the CSRD and other key ESG legislation in a matter of weeks.
  • Ensure your sustainability information is reliable by having it verified by a third party before going public.
See how we can help you on your sustainability journey