What the 2026 ESG Reporting landscape holds for UK businesses
2026 promises to be a pivotal year for ESG reporting regulation. Are you prepared for mandatory disclosure?
Reporting requirements are being rapidly ramped up as pressure grows to demonstrate ESG credentials. Businesses must stay ahead of changes in legislation and frameworks if they want to remain compliant, and meet customer demands for ESG evidence-backed data. This means understanding their current position, strengthening data collection and building robust systems to support future disclosure.
Before looking ahead to 2026, it is essential to understand the reporting requirements that currently shape the UK landscape. Wylde’s eBook Navigating Sustainability Reporting and Taxation highlights key regulations you need to be aware of including:
Streamlined Energy and Carbon Reporting (SECR)
SECR applies to all quoted companies and to large unquoted companies and LLPs that meet two of the three size thresholds of turnover above £36 million, a balance sheet total above £18 million or more than 250 employees, as well as consuming more than 40,000 kWh of energy in the UK each year. This brings many businesses at the upper end of the SME bracket into scope sooner than expected. SECR requires disclosure of UK energy use, greenhouse gas emissions, intensity ratios, methodologies and the actions taken to improve energy efficiency within annual reports.
Task Force on Climate related Financial Disclosures (TCFD)
Mandatory for LLPs, large publicly traded companies, financial institutions and private companies with turnover above £500 million and at least 500 employees. It requires disclosure on climate risk governance strategy risk management and targets to help organisations understand climate impacts on operations.
Energy Savings Opportunity Scheme (ESOS)
Applies to organisations with more than 250 employees or turnover above £44 million and a balance sheet over £38 million. It requires energy audits every four years or the use of ISO 50001 and will introduce net zero aligned requirements from Phase 4 expected in 2027.
Corporate Sustainability Reporting Directive (CSRD)
Applies to large businesses and listed SMEs operating in the EU and to UK companies with EU subsidiaries meeting employee and turnover thresholds. It requires double materiality reporting across a wide range of ESG topics with more than 1,000 data points covering full value chain impacts.
Corporate Sustainability Due Diligence Directive CSDDD
Applies to large businesses operating in the EU and non-EU companies with significant EU turnover. It requires due diligence on environmental and human rights risks in operations and supply chains with enforcement starting in 2027, with phased implementation.
EU Carbon Border Adjustment Mechanism CBAM
Applies to UK exporters selling carbon intensive goods into the EU. Companies must report embedded emissions for covered sectors and from 2026 will need to purchase carbon certificates linked to EU ETS pricing. The UK intends to introduce a parallel mechanism in 2027 to maintain competitiveness and prevent carbon leakage.
What is coming in 2026?
From 2026 the UK will move into a new phase of sustainability reporting. The government is progressing the Sustainability Disclosure Requirements framework, which will consolidate existing corporate reporting regulations and is expected to introduce mandatory Sustainability Reporting Standards (SRS) overseen by the Financial Conduct Authority.
These standards will align with the ISSB standards IFRS S1 and IFRS S2 and will require companies to disclose information on a broader range of sustainability issues, not only climate. The expectation is that companies will need to report in greater detail on governance, risk and opportunity, strategy, and performance metrics covering environmental, social and governance matters.
The introduction of mandatory assurance for sustainability data is also anticipated. This means ESG reporting will need to meet the same level of scrutiny as financial reporting. Businesses will need reliable systems, controls and audit trails to provide evidence for every claim.
Greater focus on value chains
One of the most significant shifts for the year ahead will be the increased focus on value chains. Larger companies already face pressure to report emissions and social impacts across their upstream and downstream supply chains. This pressure is moving rapidly into the SME space as supply chain reporting becomes essential for larger companies to meet their own compliance obligations.
For suppliers this means they will increasingly be asked to provide credible, verifiable data that evidences their sustainability performance. Businesses that cannot provide this information risk losing contracts and being excluded from tendering processes.
Nature focus
Until recently sustainability reporting has largely centred on climate. However, 2026 will see a growing emphasis on nature-related impacts and biodiversity. Regulators, investors and financial institutions are turning their attention to how business activities affect natural systems and how nature loss affects business resilience.
Nature-related disclosures will become a key feature of future reporting frameworks. Pressure is growing for companies to disclose impacts on biodiversity and to demonstrate how they will protect ecosystems and adopt regenerative practice. Our Business of Biodiversity eBook identifies that nature loss is a major challenge and that business has a crucial role to play in reducing damage to flora and fauna and in supporting nature positive outcomes.
A central driver of this shift is the Taskforce on Nature Related Financial Disclosures. The TNFD launched its first framework in 2023 to help businesses identify, assess and disclose nature related risks and opportunities. The framework mirrors the structure of climate reporting and consists of four pillars covering governance, strategy, risk management and metrics and targets. It introduces the concept of nature related dependencies as well as impacts, requiring businesses to understand how they both affect nature and rely on it. The TNFD recommends companies follow the LEAP process which involves locating areas of risk, evaluating dependencies and impacts, assessing risks and opportunities, and preparing disclosures.
Although TNFD reporting is not yet mandatory in the UK, it is expected to form part of the new sustainability reporting standards and will influence investor and regulator expectations. Forward thinking businesses are already engaging with TNFD principles to prepare for this shift and to demonstrate leadership on biodiversity.
Staying ahead of the game
While compliance is an important driver, there are clear commercial benefits for businesses that act now rather than waiting for mandatory requirements.
These include:
- Stronger credibility with stakeholders
- Enhanced supply chain competitiveness
- Improved access to finance and investment
- Cost savings through improved efficiency
- Better risk management and strategic planning
- Stronger brand reputation and trust
Businesses that embrace reporting as part of a wider sustainability strategy will be more agile and better equipped to respond to future regulation. Those that delay risk being caught out by data gaps, higher costs and lost commercial opportunities.
Trusted partner
At Wylde Connections we support organisations at every stage of their sustainability journey. For businesses that need to understand where they stand before 2026, our Enveglas ESG Diagnostic provides a structured tool that evaluates current performance against key environmental social and governance indicators. It identifies gaps in data collection governance maturity reporting readiness and supply chain capability. It generates a clear action plan with prioritised steps so organisations can build credibility and prepare for assurance level reporting.
Enveglas is designed for both SMEs and larger businesses. It helps suppliers provide the information their customers increasingly demand and helps larger organisations gather consistent data across complex supply chains. The next phase of Enveglas development includes integration with value chain mapping UN SDG alignment automation and impact measurement to support deeper reporting capability.
Alongside Enveglas, Wylde offers consultancy training reporting support emissions calculation value chain mapping and sustainability strategy development. Our goal is to help organisations move beyond compliance and build sustainability into business performance and competitive advantage.
If you want to build a credible resilient and future ready ESG reporting framework for 2026 and beyond nook a Discovery Call today and let us help you turn regulatory change into strategic opportunity.