How to Select Industry-Based Metrics Under UK SRS S1 Without Mandatory SASB Use

Technical status. UK SRS S1 and UK SRS S2 were published on 25 February 2026 for voluntary use. Future mandatory application is separate. The final UK amendment changes the SASB references in paragraphs 55(a) and 58(a) from 'shall' to 'may', while paragraph 48 still requires industry-associated metrics.

Limitation. Educational material. It does not determine materiality for a particular entity, replace the final UK SRS, prescribe sector-law compliance or provide an assurance conclusion.

The most important distinction is between the required reporting outcome and one possible source used to reach that outcome.

Paragraph 48 requires the metric set disclosed under paragraphs 45-46 to include metrics associated with particular business models, activities or other common features that characterise participation in an industry. Paragraphs 55(a) and 58(a), however, say that an entity may refer to and consider SASB disclosure topics and metrics and may conclude that they are not applicable in its circumstances.

A reporter therefore cannot defend a generic cross-sector dashboard simply by saying that SASB is optional. The practical question remains: which metrics best communicate performance on each material sustainability-related risk or opportunity in the context of this entity's business model and activities?

A second distinction is equally important. A metric used by a regulator, a trade body or a peer may be a strong candidate, but it is not automatically a UK SRS metric. Its purpose, population, boundary, threshold and reporting period may differ. The reporting team still needs to test relevance to primary users, faithful representation, materiality, comparability and the quality of the underlying evidence.

Required outcome

For every sustainability-related risk or opportunity that could reasonably be expected to affect the entity's prospects, paragraph 46 requires:

metrics required by an applicable UK Sustainability Reporting Standard; and

metrics the entity uses to measure and monitor the risk or opportunity and its performance, including progress towards targets.

Paragraph 48 adds that this metric set must include industry-associated metrics. Paragraph 49 requires the entity to identify the source and metric when a metric comes from outside UK SRS. Paragraph 50 specifies the information required for an entity-developed metric.

Not required

UK SRS S1 does not require:

mechanical use of every SASB topic or metric;

selection of a single SASB industry for a diversified group;

copying the metric set of a peer or sector regulator;

a fixed number of metrics for each risk or opportunity;

disclosure of every metric considered during the selection process; or

continuation of an immaterial metric merely because it appeared in a previous sustainability report.

These absences do not remove the need for a complete and controlled process. They increase the importance of documented judgement.

Step 1 — start with the material risk or opportunity

Do not begin by downloading a sector standard and copying its metric list. Begin with the sustainability-related risk or opportunity that could reasonably be expected to affect the entity's prospects.

For each item, record:

1. the affected business model, activity, product, asset, geography or value-chain relationship;

2. the route to revenue, cost, cash flow, asset value, liabilities, access to finance or cost of capital;

3. the relevant time horizon;

4. how management measures exposure, performance and progress;

5. legal or regulatory targets that apply; and

6. the decisions a metric could support.

Control point. Every selected metric should trace to a material risk or opportunity, a target, a management decision or a specific UK SRS requirement. A metric with no clear information role is a candidate for removal even if it is popular in sustainability reports.

Step 2 — map the entity's activities and industry features

A diversified entity may participate in several industries. A group might manufacture products, operate logistics assets, provide financing, sell digital services and own property. A single legal-entity classification will rarely capture all relevant industry features.

Build an activity-level map covering:

revenue-generating activities and significant operating assets;

regulated products, sites and services;

major cost drivers and operational dependencies;

significant upstream and downstream relationships;

acquired or disposed operations during the period;

industries used by management, investors, lenders and rating agencies; and

candidate SASB industries, including reasons for using more than one or rejecting an apparent match.

The output should explain why particular industry characteristics are relevant to each risk or opportunity. It also supports paragraph 59(b), which requires identification of the industries from UK SRS, SASB or other sources that the entity actually applied.

Step 3 — create a complete candidate universe

A good process considers several sources before narrowing the metric set.

Applicable UK SRS requirements

Identify any metric required by a UK Sustainability Reporting Standard that specifically applies. UK SRS S2 contains climate-specific metrics and works with UK SRS S1. An external or entity-specific metric does not displace an applicable UK SRS requirement.

UK sector regulation and official data

Consider metrics used in prudential regulation, health and safety, environmental permits, product safety, water, energy, workforce, consumer protection, cyber resilience and other relevant regimes.

These metrics often have controlled definitions and mature data systems. Their regulatory purpose or boundary may differ, however. A permit metric may be site-specific; a prudential metric may use a regulatory consolidation boundary; an incident count may exclude contractors or overseas operations. Retain the useful definition but document and reconcile the differences.

Internal management metrics

Board packs, risk appetite statements, investment appraisals, operational dashboards and remuneration scorecards are important because paragraph 46(b) captures metrics the entity actually uses.

Internal use does not automatically make a metric material or well designed. Test whether it is stable, complete, neutral and understandable to primary users. A metric designed for daily operational control may need aggregation or explanation before it is suitable for general-purpose financial reporting.

SASB Standards

SASB can provide industry descriptions, disclosure topics, accounting metrics, activity metrics and technical protocols. It is particularly useful for:

checking whether a material industry issue has been missed;

finding comparable metric definitions;

understanding common industry denominators and activity measures; and

supporting cross-company comparability.

Record the SASB industries considered and the conclusion for each topic and metric. “SASB is optional” is not an adequate rejection reason. A defensible reason might be that the metric measures a different risk pathway, uses an incompatible boundary, is immaterial for the entity or is superseded by a more decision-useful entity-specific measure.

ISSB educational and implementation material

Official ISSB materials can clarify the purpose of industry-based information and the use of SASB, particularly where the UK wording differs from IFRS S1. Treat these materials as implementation support, not as a substitute for the final UK text.

Peers and market practice

Use a controlled peer set to identify common measures and terminology. The peer set should be justified and stable. It may include entities with similar activities, geographies, regulatory profiles or capital-market characteristics.

Peer reporting is illustration, not proof of a requirement. A widely disclosed metric may still be poorly defined or immaterial for the reporting entity.

Entity-specific metrics

Where no external metric faithfully represents the risk or opportunity, design an entity-specific measure. Paragraph 50 makes the methodology visible rather than prohibiting such metrics.

Figure 1. A controlled six-stage process moves from a material risk or opportunity to an approved, disclosed metric. Original London Reporting Academy practitioner visual.

Step 4 — apply a relevance and faithful-representation test

For each candidate metric, ask:

What decision could a primary user make or change using this information?

Does it represent the identified risk, opportunity or performance pathway rather than a convenient proxy?

Is the population complete for the stated boundary?

Are numerator, denominator, unit and period precise?

Does the metric present both favourable and unfavourable performance neutrally?

Are estimates, assumptions and limitations transparent?

Can an independent reviewer reproduce the result?

A metric can be operationally accurate but not decision-useful. For example, training hours may be reliably measured yet fail to represent a critical skills-retention opportunity unless the disclosure connects them to the relevant workforce population, capability gap and business outcome.

Step 5 — design a balanced metric portfolio

One headline KPI rarely explains a complex risk or opportunity. Consider whether users need a combination of:

exposure metrics, such as assets or revenue exposed to a risk;

input or activity metrics, such as investment, inspections or training;

output metrics, such as products certified or sites remediated;

outcome metrics, such as incident reduction, reliability or retention;

leading indicators, which show preparedness or controls;

lagging indicators, which show realised performance; and

financially connected metrics, such as expenditure, avoided cost, revenue opportunity or asset exposure.

The portfolio should remain concise. More metrics are not automatically more complete. Select the smallest set that faithfully represents material performance and progress.

Step 6 — preserve comparability without freezing poor metrics

Comparability has three dimensions:

1. over time — stable definitions, boundaries and methods;

2. across entities — sufficiently common units and explanations; and

3. within the report — consistency with targets, narrative and financial information.

A metric can be changed when a redefinition or replacement provides more useful information. Paragraph 52 and the comparative guidance then require controlled treatment. Keep a metric dictionary and change log showing:

old and new definitions;

reason for change;

quantitative effect where available;

comparative treatment;

implications for targets and trends; and

approval date and owner.

Do not preserve a misleading metric merely to avoid a restatement. Equally, do not change a metric because the new definition produces a more favourable trend.

Step 7 — build anti-cherry-picking controls

Cherry-picking can occur at several points: selecting only favourable topics, choosing an easy peer group, altering a denominator, excluding poor-performing sites or replacing a metric when performance deteriorates.

Minimum controls include:

a complete candidate register before filtering;

inclusion, adaptation and rejection rationale for each plausible candidate;

a stable activity, industry and peer map;

an explicit performance-bias challenge;

independent technical review separate from preparation;

reconciliation to internal management metrics and regulatory submissions;

change control for definitions, boundaries and sources; and

governance approval of the final metric package.

Figure 2. Six controls create an audit trail around the metric-selection judgement. Original London Reporting Academy practitioner visual.

Step 8 — disclose the source, method and limitations

The published disclosure should enable users to understand what was measured and how. For an external metric, paragraph 49 requires the source and metric to be identified. For an entity-developed metric, paragraph 50 requires information about:

the definition and any adjustment from an external source;

whether it is absolute, relative or qualitative;

third-party validation, if any;

calculation method and inputs; and

limitations and significant assumptions.

Paragraph 59 separately requires identification of the specific standards, pronouncements, industry practice and other sources actually applied, and the industries specified in those sources.

A source list that merely names “SASB, GRI and peer practice” is not sufficient if the reader cannot determine which source affected which disclosure.

Context. A UK-listed group operates regulated water assets, renewable generation, construction services and logistics depots. Water availability, workforce safety and grid connection delays are material sustainability-related risks and opportunities.

Candidate universe. The team considers UK SRS S2, sector regulator data, health-and-safety statistics, internal operational dashboards, three SASB industries and metrics disclosed by a controlled peer group.

Judgement. For water resilience, the group selects leakage rate, supply interruptions, water abstracted in stressed catchments and forecast capital expenditure linked to resilience. It rejects a common peer metric on total water withdrawal because the peer boundary excludes regulated network losses and would obscure the group's most decision-useful exposure.

For contractor safety, it adapts a regulatory incident metric to include contractors across all material operations and discloses the difference from the regulatory definition. For grid delays, no suitable external outcome metric exists, so it develops a company-specific measure of capacity awaiting connection, with time bands and project-value exposure.

Evidence retained. The group keeps the activity map, candidate register, rejection rationale, metric definitions, regulator reconciliations, calculations, peer review, technical challenge and audit committee approval.

Limitation. This is an illustrative scenario. It does not prescribe metrics for a real infrastructure entity.

1. Treating optional SASB use as optional industry specificity

Risk: a generic metric set that does not represent the business model. Correction: meet paragraph 48 through a controlled industry-based selection process, whether or not SASB is used.

2. Selecting one industry for a diversified group

Risk: material activities disappear from the candidate universe. Correction: map activities and industry features at a level that reflects the risks and opportunities.

3. Copying regulatory metrics without reconciling boundaries

Risk: the same label represents a different population or reporting purpose. Correction: document and disclose the regulatory definition and every adaptation.

4. Using only metrics with complete historical data

Risk: a material issue is omitted because the data system is immature. Correction: design an estimate, qualitative measure or improvement plan where permitted and disclose uncertainty honestly.

5. Treating peer prevalence as materiality

Risk: sector fashion replaces entity-specific judgement. Correction: use peers as a completeness and comparability input, then apply the S1 objective and materiality filter.

6. Changing metrics when performance deteriorates

Risk: trend manipulation and assurance findings. Correction: require a more-useful-information rationale, comparative analysis and independent approval.

7. Listing sources without showing what was applied

Risk: users and reviewers cannot trace the methodology. Correction: link each external source and industry to the disclosures or metrics it informed.

Paragraphs 45-53: metrics and targets.

Paragraphs 54-59: sources of guidance and disclosure of sources applied.

Paragraphs 70 and B49-B54: comparatives and metric changes.

Paragraphs 74-82: significant judgements and measurement uncertainty.

Appendix D: relevance, faithful representation, comparability and verifiability.