UK tightens rules on green claims and sustainability reporting

The UK is stepping up scrutiny of environmental commitments, with new regulatory developments spanning supply chain green claims, financial disclosures and sustainability reporting standards.

The Competition and Markets Authority (CMA) has issued updated guidance clarifying that responsibility for misleading green claims now extends across the entire supply chain. Building on the 2021 Green Claims Code, the rules establish that retailers can be held liable for false environmental claims even when simply repeating information provided by a manufacturer. Crucially, all claims must be backed by verifiable evidence; if a business cannot obtain the necessary data from its suppliers, it must amend or drop the claim entirely. This marks a notable escalation in expectations, with the regulator suggesting businesses should reconsider relationships with suppliers who refuse to verify their data.

Alongside this tightening of marketing rules, the UK is formalising how companies must report their underlying sustainability data. The government recently published the finalised UK Sustainability Reporting Standards (UK SRS). While based on the global ISSB S1 and S2 frameworks, the UK has added a significant domestic twist: the removal of specific time limits on transitional reliefs. This allows voluntary reporters to omit Scope 3 emissions or defer broader sustainability metrics indefinitely, provided the use of the relief is disclosed.

The Financial Conduct Authority (FCA) is already moving to make these standards the new benchmark. It has proposed transitioning listed companies from the TCFD framework to the UK SRS starting 1 January 2027. Under a ‘comply or explain’ model, firms will face broader disclosure requirements encompassing a wide array of sustainability risks and opportunities. With the public consultation having closed last month, final rules are anticipated in Autumn 2026.

For UK businesses, the message is clear: while the government is offering flexibility on when you report complex data, the CMA is offering zero flexibility on the accuracy of the claims you make in the meantime.

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