Sustainability reporting: Six critical themes for 2026

In 2026, sustainability reporting is no longer a mere compliance or ESG exercise, but essential for your organisation’s capital allocation, risk pricing and business resilience.

With a global baseline for sustainability reporting set and endorsement for new UK ISSB-aligned reporting standards (UK SRS) imminent, the next phases of impactful sustainability reporting will be defined by implementation quality, credibility and actionability – rather than new frameworks.

This places UK businesses at a critical juncture, where the market is shifting from “what should we report?” to “how do we operationalise this at scale, credibly and cost-effectively?”

Here are six things to consider when approaching this new market landscape:

1. Sustainability reporting now directly affects financial performance.

Investors are increasingly treating sustainability-related risks as financial risks – particularly over medium and long-term horizons. Meanwhile, companies cannot often articulate sustainability risks, which means transition pathways face risks such as higher cost of capital and reduced investor confidence. Reporting acts as an early-warning system for future financial performance.

2. Fragmentation rises from poor execution.

Fragmentation persists within sustainability reporting, with market participants fatigues by overlapping requests. However, with the International Sustainability Standards Board (ISSB) standards now widely accepted as the global reporting baseline, standards creation is no longer to blame – interoperability, data reuse and proportionality are.

3. Materiality discipline is essential.

Boards are being pushed to demonstrate that sustainability issues are shaping their decisions, rather than serving as disclosures alone. Meanwhile, investors are seeking fewer metrics and clear linkage to strategy, financial performance and capital allocation – not over-disclosure. Therefore, your sustainability reporting should focus on the issues that are most critical to your stakeholders and business strategy.

4. Assurance, data quality and controls must all work together.

Sustainability reporting assurance is about reviewing disclosures to verify their accuracy, reliability and completeness to ensure compliance with reporting standards. However, trust in sustainability information depends more on the underlying systems and controls. While a broader assurance ecosystem beyond statutory auditors is expected, limited assurance is set to dominate reporting space for now.

5. AI and advanced analytics are enablers – not shortcuts.

Advanced analytics can support decision-making but poor data governance combined with AI can lead to amplified risk. Your approach should be decision-led data, not data-first reporting. In practice, this means this means starting with the question you’re trying to answer – not the dataset you happen to have. Transparent, explainable analytics will deliver more reliable insights and maintain the trust needed for credible reporting.

6. Polished does not mean perfect.

Sustainability reporting is increasingly judged by how it changes behaviour, not how polished it looks. Connecting sustainability with strategy and financial performance sends a powerful signal to the market that your disclosures and decisions are interlinked. However, integrated thinking – not just integrated reporting – differentiates resilient businesses from their competitors.