UK SRS S2 Industry-Based Metrics: Optional SASB Guidance but Mandatory Industry Judgement

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 S2 separates two propositions. First, the entity is required to disclose industry-based metrics associated with particular business models, activities or common industry features. Secondly, when identifying those metrics, the entity may refer to and consider the specific IFRS S2 Industry-based Guidance. The government deliberately changed the source wording from “shall” to “may”, but retained the underlying requirement to provide relevant industry-based information.

This distinction matters because an entity can comply with the industry-information objective without adopting every metric in a named SASB industry. Conversely, simply stating that SASB is optional does not justify a climate disclosure composed only of the seven cross-industry categories. The reporting team must still exercise industry judgement.

Industry-based metric selection starts with the entity’s climate matters and industries, then tests candidate sources before a controlled disclosure decision.

An industry-based metric is not merely a figure commonly published by competitors. It should be associated with the business model, activities or common features that characterise participation in an industry and should help users understand performance in relation to climate-related risks and opportunities. The metric therefore needs a clear connection to the entity’s prospects, strategy, risk management, capital allocation or target performance.

UK SRS S1 permits judgement in selecting relevant information and allows several sources to be considered, provided they do not conflict with UK SRS. A practical hierarchy starts with UK SRS requirements, then evaluates industry guidance and other sources against the same information objective. The hierarchy is not a licence to browse until a convenient metric appears.

1. Apply the explicit UK SRS S2 cross-industry and target requirements first. Industry metrics supplement rather than replace those disclosures.

2. Identify the entity’s material climate-related risks and opportunities, business-model characteristics and management decisions. These define the information need.

3. Consider the IFRS S2 Industry-based Guidance and relevant SASB industry materials as candidate sources, not as an automatic checklist.

4. Consider other authoritative standard-setter or regulatory sources designed to meet investor information needs, where they do not conflict with UK SRS.

5. Review credible industry practice and peer metrics for comparability, while recognising that common publication does not prove relevance or quality.

6. Design an entity-specific metric where no external metric faithfully represents the matter or where management relies on a more suitable measure.

7. Document the source actually applied, the industry classification, adaptations, rejected high-risk candidates and review approval.

A consolidated reporting entity may participate in several industries. The analysis should not force the whole group into the parent’s legal classification or the largest revenue segment. It should identify the business lines, assets or activities that drive material climate-related risks and opportunities, then test relevant industry metrics for each.

1. Create an activity map using revenue, assets, capital expenditure, emissions, risk concentrations and strategic importance rather than a single industry code.

2. Identify which activities are material to the climate disclosure and whether they require different industry lenses.

3. Assign candidate industry descriptions and explain overlaps, vertically integrated activities and emerging businesses.

4. Assess metric relevance at the appropriate level: group, segment, portfolio, asset class, geography or product line.

5. Prevent double counting where two industry sources describe the same underlying population or capital deployment.

6. Aggregate only where definitions, boundaries and denominators remain understandable. Otherwise disclose disaggregated metrics or explain the combined method.

7. Review whether acquisitions, disposals or strategy changes alter the industry map and comparative basis.

A diversified group can use several industry lenses while preserving one governed source-selection and metric-control process.

The activity map shows that physical resilience of network assets, renewable-project delivery and engineering workforce capacity create different information needs. The team retains selected network reliability and capital-deployment metrics, adds renewable-generation availability and project pipeline measures from another authoritative industry source, and develops an entity-specific metric for climate-resilience capital that reconciles to the approved investment plan. The engineering-services business does not receive a separate published metric because its climate effects are not material to group prospects, but the non-use conclusion is recorded.

The result is not “SASB compliance”. It is a UK SRS S2 metric set supported by documented industry judgement, source selection, entity-specific definitions and governance review.

This wording works only when the entity can show which topics and metrics were considered, which were applied, how adaptations were controlled, and why the resulting set is complete. It should not be copied if the entity used different sources or did not perform the underlying assessment.

The report contains cross-industry metrics but no evidence of an industry-based assessment.

The legal-entity industry code is used without considering material activities, portfolios or vertical integration.

A single industry lens is applied to a diversified group without explaining excluded business lines.

Metrics are copied from SASB or peers but the population, unit, denominator and period differ.

Entity-developed metrics are presented without explaining their definition, usefulness or changes.

Rejected metrics are undocumented, making completeness and cherry-picking difficult to challenge.

The report identifies “SASB” generally but not the industries or sources actually applied.

Industry metrics are disconnected from climate risks, strategy, targets or financial effects.