UK business &professional services firms need to prepare for a new wave of sustainability-related regulations that will reshape operations, disclosures, and client services.

One of the most significant developments is the rollout of the UK Sustainability Disclosure Requirements (SDR). Aimed at creating transparency around sustainable investment products and services, SDR will standardise how firms communicate ESG credentials, particularly in financial services and consulting. Firms will be required to justify any “green” claims, avoiding accusations of greenwashing(1).

Another key development is the implementation of International Sustainability Standards Board (ISSB) standards. These global standards are expected to form the foundation of ESG reporting across jurisdictions, and the UK government has committed to aligning domestic reporting frameworks with ISSB guidance. For professional services firms, this means preparing for a more detailed and structured approach to climate and sustainability disclosure(2).

There are also expected updates to the Modern Slavery Act 2015, which may introduce mandatory due diligence requirements. This could affect law firms, accountants, and consultants working with global supply chains or public sector clients, who will need to demonstrate clear steps to identify and address labour abuses(3).

Firms may also be impacted by proposed revisions to procurement policies. The UK government has up[date procurement regulations that place greater emphasis on ESG credentials when awarding contracts-potentially requiring carbon reduction plans and social value metrics from all bidders(4).

For firms operating internationally, the EU’s Corporate Sustainability Due Diligence Directive (CSDDD), though not UK law, will still apply to UK firms with significant EU activity or EU clients. It will require them to identify, prevent, and mitigate adverse human rights and environmental impacts in their operations and supply chains(5).

The scope and pace of change mean firms must not only stay informed, but begin integrating sustainability into compliance systems, client services, and risk frameworks to remain competitive and resilient.

Bibliography

1 Sustainability Disclosure Requirements: Implementation Update 2024 (Accessed May 2025) https://www.gov.uk/government/publications/sustainability-disclosure-requirements-implementation-update-2024

2 International Sustainability Standards Board (Accessed May 2025 )https://www.ifrs.org/groups/international-sustainability-standards-board/

3 Modern Slavery Act (Accessed May 2025) https://www.gov.uk/government/collections/modern-slavery-bill  

4 The Procurement Act 2023: A short guide for suppliers (Accessed May 2025) https://www.gov.uk/government/publications/procurement-act-2023-short-guides/the-procurement-act-2023-a-short-guide-for-suppliers-html

5 Corporate sustainability due diligence (Accessed May 2025) https://commission.europa.eu/business-economy-euro/doing-business-eu/sustainability-due-diligence-responsible-business/corporate-sustainability-due-diligence_en