UK SRS S1 SASB Optionality: What 'May Refer to and Consider' Means in Practice

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

UK SRS S1 requires an entity to disclose material information about sustainability-related risks and opportunities that could reasonably be expected to affect its prospects. Where a topic-specific UK SRS does not prescribe the information, paragraphs 57-58 require judgement to identify information that is relevant to users’ decisions and faithfully represents the matter. SASB is one permitted input to that judgement rather than a mandatory first step.

This is different from saying that industry information is optional. Paragraph 48 requires the metric set to include metrics associated with particular business models, activities or other common features that characterise participation in an industry. An entity that does not use SASB therefore still needs a credible route to the industry dimension of its disclosures.

Figure 1. UK SRS S1 permits several source routes, but all routes must lead to relevant, faithfully representative and industry-informed disclosures.

A defensible process starts with the entity’s material sustainability-related risks and opportunities and business model. It then identifies which industries and activities are relevant. A diversified group may have more than one industry; a vertically integrated group may need to consider several operating models; and a business model can change faster than the legal-entity structure. The team should avoid selecting an industry solely because it appears in a corporate classification database.

1. Confirm that the matter is a material sustainability-related risk or opportunity and identify the disclosure objective.

2. Identify the entity’s relevant business models, activities and industries, including multiple industries where necessary.

3. Review applicable UK SRS requirements first; do not use external guidance to override or conflict with UK SRS.

4. Consider relevant SASB disclosure topics and metrics as one optional source, alongside other eligible guidance and industry practice.

5. Test each candidate for relevance, faithful representation, boundary, definition, evidence, comparability and cost/effort.

6. Decide to use, adapt, replace or reject the candidate, and record the rationale and residual information gap.

7. Design any entity-specific metric or narrative information and document the paragraph 49-50 disclosures.

8. Disclose the specific standards, pronouncements, industry practice, other guidance and industries actually applied.

9. Approve the source-selection record and review it when the business model, industry, risk or source changes.

Paragraph 59 requires the entity to identify the specific standards, pronouncements, industry practice and other guidance it has applied in preparing its sustainability-related financial disclosures, including identifying applicable metrics. It also identifies the industries used in preparing the disclosures. This gives users visibility over the technical basis without requiring the entity to reproduce the underlying standards.

UK SRS S1 does not state a blanket requirement to publish a catalogue of every SASB metric considered and rejected. Paragraph 59 focuses on the sources and industries actually applied. Nevertheless, an internal non-use rationale is important because it evidences the judgement required by paragraphs 57-58 and helps reviewers test whether the industry assessment was complete rather than avoided.

A public explanation of non-use may be appropriate where it is material to understanding the disclosure basis, where users might otherwise infer that a familiar industry metric was used, where the entity materially adapts a recognised metric, or where the absence of industry information could obscure a significant limitation. The wording should explain the entity-specific reason, not criticise the source or imply that the whole SASB framework is irrelevant.

Figure 2. Source governance links industry identification, candidate guidance, applicability, final information, public source disclosure and internal rationale.

A diversified group should not select one SASB industry solely at parent level and apply it to every business. Paragraph 59’s requirement to identify the industries used supports a more granular analysis. The group can map operating segments, activities and material risks or opportunities to relevant industries, while retaining one group-level materiality and disclosure governance process.

Illustrative scenario. A UK group operates data centres and professional services. It identifies energy-price exposure, water availability, cyber resilience and talent retention as material sustainability-related risks or opportunities. The team maps the data-centre activity and the professional-services activity to separate industry sources.

For energy and water, it uses relevant SASB metrics with the source and industries identified. It adapts a workforce metric because the group’s internal definition includes contractors essential to service delivery; the report explains the difference and method. It rejects a SASB metric that relates to a product activity the group does not undertake and records the reason internally. For cyber resilience, it uses another recognised source and an entity-developed incident metric. The final basis-of-preparation note identifies every source and industry actually applied, while the source-selection file retains the rejected candidates and approvals.

Why it works: it identifies the source-selection basis, industries, actual source use, adaptations and entity-developed information. The entity must replace the placeholders, confirm licences and source editions, and avoid implying that every SASB metric was applied or that the resulting report is “SASB compliant”.

Treating the UK amendment as removal of industry-associated information.

Applying every SASB metric for a selected industry without testing the entity’s material risks, opportunities and facts.

Choosing one industry for a diversified group without mapping activities or segments.

Using a SASB metric name after changing the calculation, denominator or perimeter without disclosure.

Failing to identify the standards, guidance and industries actually applied.

Using peers as a substitute for source and methodology analysis.

Keeping no record of candidate sources considered and rejected.

Publishing a generic “SASB aligned” or “SASB compliant” claim that exceeds the documented use.

Ignoring copyright, licence and version controls for external guidance.

Failing to reassess source selection after an acquisition, business-model change or standards update.