UK SRS S1 Metrics and Targets: Industry Information, Entity-Specific KPIs and Progress

Educational practitioner guidance. Not legal or assurance advice. Verify the current UK SRS text, applicable reporting rules and entity-specific facts before acting.

The objective of the metrics and targets disclosures is to enable users of general purpose financial reports to understand the entity’s performance in relation to sustainability-related risks and opportunities, including progress towards targets the entity has set and targets it is required to meet by law or regulation. The disclosure therefore starts with the material risk or opportunity and the information needs of investors, lenders and other creditors. It does not start with a catalogue of data that happens to be available.

Paragraph 46 creates two main metric routes. First, the entity discloses metrics required by an applicable UK Sustainability Reporting Standard. Secondly, it discloses the metrics it uses to measure and monitor the risk or opportunity and its performance, including progress towards targets. In the absence of a topic-specific UK SRS, paragraphs 57-58 govern the judgement used to identify applicable information and metrics.

Figure 1. UK SRS S1 combines applicable UK SRS metrics, entity-used metrics and industry-associated information inside one controlled target and performance architecture.

Paragraph 48 states that the metrics disclosed under the metrics and targets requirements include metrics associated with particular business models, activities or common industry features. This is a substantive requirement. The UK amendment changes how an entity may find that information: in the absence of a topic-specific UK SRS, the entity may refer to and consider SASB disclosure topics and metrics, and it may conclude that a particular SASB metric is not applicable in its circumstances.

The entity may also consider other standard setters, industry or geographical peers and the sources in Appendix C, provided the sources do not conflict with UK SRS and assist the entity in meeting the Standard’s objective. Paragraph 59 then requires identification of the specific standards, pronouncements, industry practice and other guidance actually applied, together with the industries used in preparing the disclosures and identifying applicable metrics.

An internal KPI can be useful evidence of what management actually monitors, but that fact alone does not make it suitable for external reporting. The team should test whether the KPI is connected to a sustainability-related risk or opportunity affecting prospects, whether it is material in the complete disclosure set, and whether its definition and calculation can be understood and reproduced.

UK SRS S1 recognises that sustainability information often cannot be measured directly. Paragraphs 77-82 require information about the most significant uncertainties affecting reported amounts, including identification of amounts subject to a high level of measurement uncertainty, the sources of uncertainty and the assumptions, approximations and judgements used. The Standard states that reasonable estimates are an essential part of preparation and do not undermine usefulness when they are accurately described and explained.

This means the metric should not disappear merely because some inputs are estimated. Instead, the team should record the estimate type, coverage, data-quality issue, model, assumption, sensitivity where relevant, reviewer and planned improvement. If a prior-period metric was estimated and a better measure becomes available, the comparative requirements in B50-B52 may require revised comparative information and an explanation, subject to the stated impracticability and forward-looking exceptions.

For each target, paragraph 51 requires the metric used, the specific quantitative or qualitative target, the period over which it applies, the base period, milestones or interim targets, performance and trend or change analysis, and revisions with explanations. A “base period” is the point from which progress is measured; it should not be confused with a target approval date or a convenient data year selected after performance is known.

The Standard does not use a separate phrase such as “missed-target disclosure”. However, performance against each target and analysis of trends or changes must be disclosed, and fair presentation requires a complete, neutral and accurate depiction. In practice, a missed milestone should therefore be reported plainly, with the magnitude of the shortfall, reasons, implications, corrective action and whether the target itself has been revised. Quietly rebasing or replacing the target would obscure performance.

Figure 2. The metric lifecycle should be controlled from definition and perimeter through calculation, target linkage, comparative review and publication.

1. Start with the risk and opportunity register. Identify the matters that could reasonably be expected to affect prospects and the information used by management and primary users.

2. Map applicable requirements. Apply topic-specific UK SRS metrics where available; otherwise perform the paragraph 57-58 source-selection judgement.

3. Identify industry information. Document business models, activities, industries and candidate sources, including SASB where useful but not automatically.

4. Rationalise the KPI set. Remove duplicated, immaterial or purely operational measures from the external candidate set while retaining internal management metrics as needed.

5. Complete the data dictionary. Lock definition, perimeter, method, inputs, assumptions, limitations, owner, evidence and control.

6. Connect targets. Ensure every target uses a controlled metric and records base period, target period, milestones and progress method.

7. Run the change and comparative review. Assess changes in method, estimates, boundaries, source and target; determine comparative and explanation consequences.

8. Draft balanced performance wording. Show achievements, shortfalls, trends, uncertainty and corrective action without selectively presenting favourable results.

9. Obtain finance and governance sign-off. Confirm connection to strategy and financial information, source disclosure, version control and final claims.

The group retains a small number of metrics connected to the two matters: regretted voluntary turnover in critical roles; time to competence for selected roles; energy cost exposure by contract type; and energy intensity for major offices. It uses a SASB workforce metric as a candidate input but adapts the definition to its critical-role population. The disclosure identifies the source, describes the adjustment, records the method and limitations, and explains that the first comparative period was restated after improving the leaver classification.

The group also has a two-year retention target. The interim milestone is missed. Rather than revising the baseline, it reports actual performance, the gap, the effect of a business acquisition on the population, corrective actions and the unchanged final target. The data dictionary links the target to the metric version and boundary reconciliation.

Choosing metrics because they are easy to collect rather than because they measure a material risk, opportunity or target.

Treating the optional SASB reference as permission to omit industry-associated information.

Using an external metric name while changing the denominator or perimeter without disclosure.

Failing to identify the source of a metric taken from outside UK SRS.

Using RAG status without defining thresholds, evidence and governance.

Reporting targets without a base period or without a controlled progress calculation.

Revising targets or methods without explaining the change and comparative effect.

Presenting only favourable KPIs and treating poor performance as “not material”.