UK SRS S1 Primary Users and 'Prospects': What Information Is Decision-Useful?

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London Reporting Academy · Controlled publication draft · 3 August 2026

UK SRS S1 begins with a decision purpose. The disclosures are prepared for existing and potential investors, lenders and other creditors because they decide whether to provide resources to the entity and on what terms. That purpose determines what information is relevant, how materiality is judged and why the report focuses on the entity's prospects rather than every sustainability matter that may interest the public.

This boundary does not make employees, communities, customers, suppliers, society or nature irrelevant. The entity depends on resources and relationships and can preserve, develop, degrade or deplete them. Those dependencies and impacts may create operational, regulatory, market, legal, reputational or strategic risks and opportunities. The reporting question is whether the pathway could reasonably affect cash flows, access to finance or cost of capital, and whether information about it could influence primary users' decisions.

UK SRS S1 defines primary users as existing and potential investors, lenders and other creditors. The group is wider than current shareholders. It includes parties deciding whether to buy, sell or hold equity or debt; whether to provide or sell loans or other credit; and whether to vote or otherwise influence management’s use of the entity’s economic resources.

The standard is designed around common information needs, not every individual request. A retail shareholder, bond investor, bank credit committee, trade creditor and potential lender may use different models, but they all assess returns, uncertainty and stewardship using the general purpose financial reports. The entity does not need to satisfy every preference or disclose immaterial information merely because one user asks for it.

UK SRS S1 uses 'prospects' as shorthand for the entity's cash flows, access to finance and cost of capital over the short, medium and long term. It is forward-looking, but current effects matter when they inform expectations about future performance, risk, financing or management stewardship.

An effect does not have to be recognised as an asset, liability, income or expense in the current financial statements before the information can be material. Users assess future cash flows and uncertainty. A workforce dependency, supplier disruption, licence-to-operate issue or emerging market opportunity may be decision-useful before accounting recognition criteria are met. The sustainability disclosure should nevertheless connect to financial planning and the related financial statements and explain significant differences in data, boundary, horizon or assumptions.

Primary users form expectations about dividends, principal and interest payments, market-price changes and other returns. Those expectations depend on the amount, timing and uncertainty of future net cash inflows. They also depend on stewardship: how management and the governing body use resources, oversee risks, pursue opportunities and respond when evidence shows that a strategy or control is not working.

This is why governance information can be decision-useful even when it is not a cash-flow number. Late information, weak challenge, repeated target slippage or unresolved control failures can increase uncertainty around future performance. The report should explain the mechanism and relevant outcomes, not claim that a particular governance process guarantees financial success.

The reporting audience and the source of evidence are different concepts. Employees may reveal capability and safety dependencies; communities may reveal permit, trust or local infrastructure constraints; customers may reveal demand or product risks; suppliers may reveal labour, resource or continuity exposure; and scientific evidence may reveal ecological dependency. The entity then assesses whether these facts create a sustainability-related risk or opportunity that could affect prospects.

1. Identify the resource, relationship, dependency or impact and where it occurs in the business model or value chain.

2. Explain the mechanism through which the issue could create a risk or opportunity for the entity.

3. Assess the potential effect on cash flows, access to finance or cost of capital over relevant time horizons.

4. Consider whether the information could influence the common decisions of primary users.

5. Apply entity-specific materiality, including nature, magnitude, likelihood, timing, aggregation and qualitative factors.

6. If material, connect the information across governance, strategy, risk management, metrics and targets and to financial reporting.

Visual: From resources and relationships to primary-user decisions

The pathway prevents two opposite errors: ignoring stakeholder evidence because the stakeholder is not a primary user, and reporting every stakeholder concern without testing the effect on prospects.

A matter may be important to society or a stakeholder group and still sit outside UK SRS S1 if it could not reasonably be expected to affect the entity’s prospects. That conclusion should not be reached merely because the effect is difficult to quantify, long term or uncertain. It should be based on reasonable and supportable information and a documented assessment of the financial pathway.

The filter should start with the issue and end with the likely decision effect, not with whether a topic appears on a generic ESG checklist. The reporting team can record the following questions in its issue register or materiality file:

• What resource, relationship, dependency, impact, risk or opportunity is being considered?

• Where does it arise in the reporting entity’s business model or value chain?

• What current condition or plausible future event creates the pathway to prospects?

• Which financial channel could be affected: cash flows, access to finance or cost of capital?

• Over which time horizon could the effect occur, and how does that horizon link to planning?

• Could the information influence a common decision of investors, lenders or other creditors?

• Is the information material individually or together with related information, including low-probability high-impact outcomes?

• What evidence, assumptions, uncertainty, owner and approval support the conclusion?

Visual: Decision-usefulness filter

The decision aid is a structured prompt, not an automatic scoring model. Professional judgement remains necessary, and low-probability or long-dated outcomes should not be dismissed without analysis.

The community is not the primary user of the UK SRS report, but its evidence is relevant to identifying the dependency and impact. The reporting team combines catchment data, permit conditions, production scenarios, community engagement, engineering assessments and financial planning. It identifies potential restrictions, treatment cost, production interruption and capital expenditure for efficiency or alternative supply.

The materiality decision is based neither on the popularity of the issue nor on the existence of a complaint. It is based on whether information about the risk could influence investors and lenders by changing their assessment of future cash flows, refinancing conditions, covenant headroom or management stewardship. The report explains concentration at the site, response, resource allocation, uncertainty and financial-planning connections. A separate impact report may provide additional information about community and ecosystem effects.

UK SRS S1, February 2026: paragraphs 1-6, 17-24 and B1-B28.

UK Government, UK Sustainability Reporting Standards guidance: current voluntary-use status.

FRC, Sustainability Reporting Developments FAQs, 26 February 2026.

FRC, Guidance on the Strategic Report, February 2026: report purpose and communication context; non-mandatory.