UK SRS for CFOs: Why climate risk is a financial opportunity

This year, there's been a big uptick in the number of conversations I've had with businesses about climate risk, prompted by a significant rise in awareness of the physical climate risks to business operations. Capgemini's 2026 survey of 2,100 senior executives at large organisations shows a similar upward trend: 68 per cent say their organisation now actively prioritises climate adaptation, up from 56 per cent a year earlier.

Interest in UK Sustainability Reporting Standards (UK SRS) has also noticeably increased, even though it's still voluntary for most organisations, while the FCA has now confirmed changes to the UK Listing Rules requiring certain listed companies to report against it from January 2027.

UK SRS is a climate risk reporting framework based on ISSB's IFRS, that asks companies to explain the risks and opportunities that could affect their cash flows, access to finance and cost of capital. For CFOs, this makes UK SRS more than another reporting requirement. It's an opportunity to understand where climate change could affect financial performance – and where investment could deliver returns.

Climate impacts and how far they've been quantified

In the Capgemini survey of more than 700 companies with revenues over $1bn, 87 per cent report climate-related supply chain disruptions, and 77 per cent say climate change has already affected their revenue.

Capgemini's survey considers large, well-resourced corporations, yet even there, a significant gap has opened up between rising investment and the analysis needed to effectively direct that capital. Just 15 per cent have quantified the financial impact of climate-related disruption on their business.

Across UK businesses more widely, the position is weaker still. The October 2026 ONS Business Insights and Impact survey found that 73 per cent of UK businesses had not assessed any climate change risks.

For a CFO, the gap between exposure and quantification is the most revealing finding: an exposure that hasn't been costed can't be priced into forecasts, capital plans or conversations with lenders. The same discipline should be applied to the upside, or businesses risk missing opportunities to cut costs and open up new markets.

Climate risk and existing risk processes

An issue I come across frequently is the separation of climate from other business risks. The way the TCFD recommendations were presented meant that climate risk was set up as a separate workstream with its own governance and report, despite clauses requiring organisations to embed climate risks into existing processes. Many companies still run it separately to the general risk register, and see it as a sustainability issue rather than a financial one.

Because business interruption is one of the top three business risks, along with cyber attacks and AI, it's essential to embed climate into central processes. If a company doesn't adjust its operations to climate breakdown, risks such as legislation and market changes could become a footnote.

Finding the opportunities across operations and supply chains

Focus on climate-related opportunities is at last starting to gain momentum. In the Capgemini survey, 69 per cent of organisations report a positive return on their sustainability initiatives, up from 49 per cent in 2025.

Spotting those opportunities requires creativity, and this is where business leaders can really excel. To start a business or be a CFO or CEO, you have to be able to visualise the future and how your business fits into it. What will people need, or want, or not have enough of? What could we change in our offering to make the company more resilient and profitable?

At 51toCarbonZero we built our AI-powered 51 Delta Intelligence platform around these questions. What makes the Delta different is its focus on opportunities: it provides a strategic investment roadmap that maximises climate-related opportunities while diminishing risks, across assets, suppliers and product lines.

Supply chains are often where risks and opportunities are least visible. Delta profiles each supplier's physical risk using geospatial projections, and estimates the financial exposure if supply were interrupted under IPCC scenarios, so procurement and finance can decide where to diversify, hold more stock or work with a supplier on its own resilience, before a disruption forces the decision.

Across real estate portfolios, Delta benchmarks each site's energy use and carbon and costs every reduction action by capital outlay, annual savings and payback, so CFOs can rank it against other demands on capital. Physical risk is shown as an annual financial value at risk, which puts adaptation spending on the same footing as an insurance premium. The result is a recommendation for each site, from invest or adapt to plan an exit.

An AI-powered platform is transformative, integrating sustainability, finance and risk into a consolidated roadmap that puts companies in a much stronger position.

Preparing while reporting is voluntary

None of this needs a new committee or a large programme. I'd suggest starting with what's already underway:

• Add climate risks and opportunities to the existing risk register.
• Use a dedicated tool such as 51 Delta Intelligence to turn data into a strategic roadmap ranked and weighted to the CFO's priorities, such as low capital outlay or the shortest payback.
• Put the findings into the next budget and forecast.

From disclosure to strategic financial decisions

Ultimately, the value of UK SRS lies in what businesses do with the information. By using climate data to inform financial decisions, CFOs can better manage risks, identify opportunities for growth and build a stronger case for investment. It also gives the board the answer to a more useful question than what has to be disclosed: what should the business do differently to succeed?

Emma Littlewood is director of policy & research at 51toCarbonZero.

This article is sponsored by 51toCarbonZero.