Short answer
The answer, before the reasoning
UK SRS S2 Appendix C4 allows an entity applying the Standard voluntarily to omit Scope 3 greenhouse gas emissions, including the additional financed-emissions information for asset management, commercial banking and insurance. The provision has no stated expiry date in the voluntary Standard.
However, it is a disclosure relief—not a conclusion that Scope 3 is immaterial, not a waiver of climate-risk identification or governance, and not a promise that future FCA, Companies Act or other mandatory rules will offer the same treatment. If used, the entity discloses the relief alongside its compliance statement; C5 also permits the relief for comparative information in later periods.
C4 changes the disclosure obligation, not the underlying materiality, risk or governance analysis.
At a glance
1. What C4 does—and does not do
Appendix C4 states that an entity applying UK SRS S2 is not required to disclose Scope 3 emissions, including financed-emissions information where relevant. Unlike the first-period measurement relief in C3, C4 has no stated time limit in the voluntary Standard. The UK government chose an open-ended voluntary relief, while reserving the ability of mandatory UK routes to set different requirements.
C4 changes the disclosure obligation. It does not change the definitions of climate-related risks and opportunities, the investor-focused materiality test, the requirement to understand value-chain effects, or the need for governance and risk-management processes. A Scope 3 concentration can influence prospects even where the entity uses C4.
2. Availability and the voluntary-use condition
The relief is available within UK SRS S2 as a voluntary Standard. Appendix C6 states that where an entity is required to apply UK SRS S2 under UK law or regulation, availability and application of C3 and C4 are subject to the Companies Act, FCA rules or other UK requirements. A company therefore needs two records: the Standard-based relief decision and the regulatory-applicability memorandum for its actual route.
3. C4 does not prove immateriality
Materiality determines what information could influence primary users’ decisions. Relief determines whether a requirement must be provided in a specified circumstance. These are different decisions. The entity should therefore retain its Scope 3 category screening, value-chain concentration analysis and climate-risk register even if it omits the Scope 3 metric.
4. Can selected Scope 3 categories still be disclosed?
C4 removes the requirement to disclose Scope 3; it does not prohibit useful voluntary information. An entity may choose to provide selected category information, a screening result or management-used metrics. This is an implementation choice rather than an express “selected-category compliance” route. The report should say clearly that C4 is being used and that the selected information is not a complete Scope 3 inventory unless it actually meets that description.
The wording must be supported by a documented category assessment, selected-metric methodology, limitations and board approval. It should not imply that omitted categories are immaterial.
5. Financed emissions are included in the relief
For entities in asset management, commercial banking or insurance, C4 expressly includes the additional financed-emissions information. A financial institution can therefore omit Scope 3 and the detailed financed-emissions disclosures under the voluntary relief. Nevertheless, financed emissions may be central to transition-risk analysis, risk appetite, portfolio strategy and investor questions. Many institutions will continue building the calculation and classification architecture even if public disclosure is deferred.
6. Comparative information under C5
C5 permits an entity that used C3 or C4 to continue using the relief for comparative information in later reporting periods. This avoids presenting a current-period metric with a misleadingly incomplete comparative. It does not create an endless ability to omit current-period Scope 3 under any mandatory route; the current-period use of C4 remains subject to the Standard and Appendix C6.
7. What must be disclosed
UK SRS S1 paragraph 73A requires use of the relief to be disclosed alongside the statement of compliance. The report should identify C4, explain the affected information and avoid an unqualified impression that a complete Scope 3 inventory has been reported. A stronger voluntary disclosure also explains governance, current category work, limitations and the roadmap, although those additional details are implementation practice rather than a prescribed C4 checklist.
The governance file should support the relief decision even where the public disclosure is concise.
8. Investor questions the board should anticipate
Which value-chain categories are likely to be largest or most exposed to transition risk?
What information does management already use, even if it is not yet publication-ready?
Does the omission hide a concentration in products, suppliers, customers or investments?
How does the relief affect targets, transition planning and financial effects?
What are the principal data gaps, estimates and control weaknesses?
When will category coverage improve, and what could accelerate or delay it?
How would the disclosure change under final FCA or Companies Act requirements?
9. Relief governance workflow
Complete the Scope 3 category and prospects screening.
Identify information used internally and material investor questions.
Assess data coverage, methodologies, estimates and control maturity.
Confirm the reporting route and whether C4 is legally available.
Approve the relief rationale, selected voluntary information and roadmap.
Draft the compliance statement and explicit relief disclosure.
Plan comparative treatment and annual reassessment.
Monitor FCA, Companies Act, sector and contractual requirements.
10. Hypothetical consumer-products example
11. Common mistakes
Writing “Scope 3 is not material” merely because C4 is used.
Omitting the relief from the compliance-statement area.
Providing selected categories without saying that they are not a complete inventory.
Ignoring financed-emissions architecture because the public metric is deferred.
Assuming C4 will automatically remain available under final FCA or Companies Act rules.
Failing to plan comparatives when Scope 3 is introduced.
Treating a relief decision as a sustainability-team decision without board or finance challenge.
12. Scope 3 relief checklist
Reporting route and C4 availability confirmed.
All 15 categories screened and materiality distinguished from relief.
Financed-emissions implications assessed.
Selected voluntary information clearly labelled and controlled.
Compliance statement includes explicit relief disclosure.
Governance approval and investor-question analysis retained.
Comparative treatment documented.
Category improvement roadmap and owners approved.
FCA, Companies Act and other future limits monitored.
Sources, status and limitation
The relief analysis reflects UK SRS S2 as issued for voluntary use in February 2026. Final mandatory routes can alter availability, scope, wording, timing or explain requirements. Companies should update the article and their decision memo when the FCA or government issues final rules.
Quick orientation
Quick orientation
- Applies to
- Voluntary UK SRS S2 reporters considering omission of all or part of their Scope 3 information.
- Primary decision
- Whether to use C4, what to disclose, what information to continue developing and how to prepare for future mandatory rules.
- Key sources
- UK SRS S2 Appendix C4-C6; UK SRS S1 paragraphs 72-73B; paragraph 29(a)(vi) and B58-B63A.
- Common confusion
- Equating “not required to disclose under C4” with “not material”, “not relevant” or “not worth measuring”.
Rule
REGULATORY WATCH
The FCA’s 2026 consultation proposed a comply-or-explain approach for Scope 3 in the listed-company route. That proposal is not the same as the unconditional voluntary C4 architecture and must be replaced by the final rule when issued.
In practice
Question
| Question | Materiality decision | Relief decision |
|---|---|---|
| Could value-chain emissions affect prospects? | Analyse transition exposure, products, suppliers, customers and financing. | C4 does not remove this analysis. |
| Could category information influence investors? | Assess nature, magnitude, concentration and qualitative factors. | C4 can still permit omission of the Scope 3 metric. |
| Is data incomplete? | Document estimates, uncertainty and improvement opportunities. | Data readiness may inform governance rationale but is not the same as immateriality. |
| Is a mandatory route applicable? | Materiality still applies. | Check whether the route restricts or replaces C4. |
Hypothetical scenario
ILLUSTRATIVE WORDING — SELECTED INFORMATION
“The Group has applied UK SRS S2 Appendix C4 and has not presented a complete Scope 3 inventory. To support users’ understanding of transition exposure, it reports estimated Category 1 and Category 11 emissions, which management currently uses in procurement and product-planning decisions. These categories do not represent all Scope 3 categories. The Group is expanding category coverage and data controls.”
Illustrative only. It shows how the decision is made, not wording that can be copied or relied on.
Hypothetical scenario
HYPOTHETICAL EXAMPLE
A consumer-products group concludes that purchased materials and use of sold products are significant transition-risk drivers. Its first voluntary UK SRS S2 report uses C4 because Category 11 modelling and supplier coverage are not yet controlled. The report discloses C4 alongside the compliance statement and provides a management-used Category 1 estimate with clear limitations. The board approves a two-year data and control plan. The group does not state that Scope 3 is immaterial. Illustrative scenario only.
Illustrative only. It shows how the decision is made, not wording that can be copied or relied on.
Questions
Questions people ask
Is the UK SRS S2 Scope 3 relief time-limited?
Appendix C4 states that an entity applying UK SRS S2 is not required to disclose Scope 3 emissions, including financed-emissions information where relevant. Unlike the first-period measurement relief in C3, C4 has no stated time limit in the voluntary Standard.
Does C4 mean Scope 3 is immaterial?
UK SRS S2 Appendix C4 allows an entity applying the Standard voluntarily to omit Scope 3 greenhouse gas emissions, including the additional financed-emissions information for asset management, commercial banking and insurance. The provision has no stated expiry date in the voluntary Standard. However, it is a disclosure relief—not a conclusion that Scope 3 is immaterial, not a waiver of climate-risk identification or governance, and not a promise that future FCA, Companies Act or other mandatory rules will offer the same treatment.
Can selected categories be disclosed?
C4 removes the requirement to disclose Scope 3; it does not prohibit useful voluntary information. An entity may choose to provide selected category information, a screening result or management-used metrics. This is an implementation choice rather than an express “selected-category compliance” route.
Does the relief include financed emissions?
For entities in asset management, commercial banking or insurance, C4 expressly includes the additional financed-emissions information. A financial institution can therefore omit Scope 3 and the detailed financed-emissions disclosures under the voluntary relief. Nevertheless, financed emissions may be central to transition-risk analysis, risk appetite, portfolio strategy and investor questions.
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