Two new obligations, an expanded framework and an updated compliance cycle — for clients in scope, 2027 is set to be a heavy year for regulatory reporting.
UK SRS, UK CBAM, CSRD and ESOS Phase 4 each carry their own scope, data requirements and timelines. The ESG consultants in demand when they land are the ones having the preparation conversations now.
In this post, we take a quick look at the key changes in 2027 and what they mean for your clients and your sustainability consultancy. Don't have time to read a full blog? Here's what's changing at a glance:
- UK SRS (S1 and S2): Published in February 2026, the UK's new sustainability and climate disclosure standards are currently voluntary, with mandatory applicability expected from January 2027 for certain UK-listed companies, subject to final FCA rules.
- CSRD second wave: Following Omnibus I, the scope is narrower than originally anticipated, but large companies with significant EU operations remain in scope and must report on FY2027, with reports due in 2028.
- ESOS Phase 4: Organisations qualifying as of 31 December 2026 face a compliance deadline of 5 December 2027, with Phase 4 bringing meaningful changes from the previous cycle, including more granular reporting requirements.
- UK CBAM: Starting in January 2027, the UK's Carbon Border Adjustment Mechanism applies a carbon cost to imports from emissions-intensive sectors, beginning with steel, aluminium, cement, fertilisers, hydrogen and ceramics.
UK SRS (S1/S2)
While the UK Sustainability Reporting Standards are currently voluntary, we expect mandatory reporting to begin for certain UK-listed companies from January 2027, subject to final FCA rules, with large private companies likely to follow after further government consultation.
UK SRS requires clients to connect their carbon data to financial risk narratives, scenario analysis and governance disclosures. For most practices, that's a broader engagement than a standard carbon footprint.
The data collection requirement is also substantial. Clients need structured, auditable evidence that holds up to scrutiny from investors, auditors and regulators. The organisations that will struggle most are those currently managing their carbon data informally, because there's no shortcut to building an evidence trail retrospectively.
The mandatory reporting requirements aren't yet confirmed, but the data collection requirements are the same either way. Many listed companies will be seeking a consultant to help them prepare and build the right data infrastructure over the coming months.
CSRD second wave
The scope of CSRD looks very different now than it did two years ago, with the EU's Omnibus I simplification package cutting an estimated 80% of originally in-scope companies out. However, significant reductions in scope don't change the obligations for those still in it.
The wave two cohort includes: EU companies with more than 1,000 employees and a net annual turnover above €450 million; and non-EU companies generating more than €450 million in EU turnover with an EU subsidiary or branch above €200 million. Under the current timetable, affected organisations are expected to report in 2028 on FY2027 data.
Double materiality remains at the core of CSRD. Clients aren't just reporting on how climate affects their business; they're also reporting on how their business affects the climate and society. This is a broader test than most UK disclosure frameworks apply, and it expands the scope of what needs to be evidenced and documented.
What matters now is the audit trail. CSRD requires a consistent methodology across periods, structured data collection and third-party assurance, meaning that clients must make methodology decisions before the reporting period begins.
Learn more about CSRD reporting software
ESOS phase 4
The ESOS phase 4 qualification date is 31 December 2026. Any organisation with 250 or more employees, or a turnover above £50 million and a balance sheet above £43 million, falls in scope and faces a compliance deadline of 5 December 2027.
Phase 4 also introduces:
- The removal of Display Energy Certificates and Green Deal Assessments as valid compliance routes.
- The requirement for all assessments to be signed off by a qualified lead assessor (subject to the limited exemptions available under the ESOS regulations, including organisations with very low total energy consumption and those fully covered by a certified ISO 50001 energy management system).
Reporting is more granular, too. Participants must report total energy consumption in kWh, calculate energy intensity ratios across buildings, transport, industrial processes and other uses, and provide estimated energy savings since the last compliance period.
Clients who haven't identified a lead assessor or started gathering consumption data are already behind. The window between qualification and the compliance deadline is tighter than it looks once you factor in assessor availability and the time needed to collect structured energy data across a large estate.
UK CBAM
UK CBAM goes live in January 2027. Importers of steel, aluminium, cement, fertilisers, hydrogen and ceramics will need to account for the embedded carbon in their imports, based on country of origin and production process.
The central challenge is data. What clients need to report doesn't usually sit with them; it sits with overseas suppliers, often in jurisdictions with limited carbon reporting infrastructure. Building a collection process means identifying the right supplier contacts, agreeing on what to report on and in what format, and documenting the methodology where actual supplier data isn't available.
Consultants who wait for clients to ask about CBAM will be spending their evenings doing emergency data collection, while those raising it now can help clients build something structured before the first reporting window opens. And, with quarterly CBAM returns starting in January 2028, the infrastructure built now will make those returns more manageable.
What every 2027 sustainability compliance framework has in common
Put the four frameworks side by side, and the same problems appear: auditable data with a clear evidence trail, consistent methodology across reporting periods, and documentation that can withstand third-party scrutiny.
A spreadsheet in a shared email thread will struggle to provide the required evidence (who collected this data, when, from which source, using which methodology, and what changed since last year). When questions arise in assurance processes, investor reviews and regulatory audits, the answer needs to be retrievable, not reconstructed.
In practice, that means one place where client data is collected and stored, a documented methodology applied consistently across periods, version control so nothing gets silently overwritten, and an audit trail that exists without anyone having to rebuild it.
How to turn a compliance deadline into a client conversation
Many clients won't raise these frameworks unprompted — they need you to spark those conversations.
- For listed clients, on UK SRS: Ask whether they've considered what climate-related financial disclosures they'll need from existing carbon data.
- For clients importing from relevant sectors, on CBAM: Ask whether they've started reviewing the data they need to collect and whether their current suppliers can support it.
- For clients with EU operations or EU-linked supply chains, on CSRD: Ask whether they've started building an audit trail; if not, what they need to get started.
Getting ahead of it
We built TrackZero, the carbon management platform for ESG consultants, to manage multiple clients through exactly this kind of regulatory moment: multi-client data collection, consistent methodology and audit trails that hold up when needed. If you're thinking about how your practice handles what's coming and looking for a carbon spreadsheet alternative, book a demo or start free at trackzero.eco.
