On September 30, 2026, the UK’s Financial Conduct Authority (FCA) published Policy Statement PS 26/19 Aligning listed issuers’ sustainability disclosures with international standards, together with amendments to the UK Listing Rules. Under the new rules, in-scope listed companies will report against the UK Sustainability Reporting Standards (UK SRS) on a “comply or explain” basis. The rules take effect for accounting periods beginning on or after January 1, 2027, and the first disclosures will appear in annual reports published in 2028.

The UK SRS will replace the current climate reporting regime, which is based on the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD) and has applied to premium listed companies since 2020 and to other listed issuers since 2021. Published in final form by the UK government in February 2026, the UK SRS consist of UK SRS S1 (general requirements for sustainability-related financial disclosures) and UK SRS S2 (climate-related disclosures). Both are modelled on IFRS S1 and S2, issued by the International Sustainability Standards Board (ISSB), which centre on information that is financially material to investors. The FCA aims to align UK listed company reporting with international standards while giving issuers flexibility through the comply or explain mechanism. The new rules are set out in Appendix 1 to PS 26/19, and the FCA has provided further clarification on its approach on these new rules at a webinar held on October 19, 2026, which is summarised below.

New reporting regime

Scope. The new rules apply to the same issuers currently subject to TCFD reporting, being those listed in the following categories: (i) Equity Shares (Commercial Companies) (UKLR 6); (ii) Equity Shares (International Commercial Companies Secondary Listing) (UKLR 14); (iii) Certificates representing certain securities (depositary receipts) (UKLR 15); (iv) Non-equity shares and non-voting equity shares (UKLR 16); and (v) Equity Shares (Transition) (UKLR 22). Closed-ended investment funds (UKLR 11), open-ended investment companies (UKLR 12), shell companies (UKLR 13) and issuers in the debt, securitised derivatives and miscellaneous securities (UKLR 17 to 19) categories as well as AIM companies continue to fall outside the rules.

Comply or explain. Issuers will be required to report in line with UK SRS S1 and S2 (including Scope 3 greenhouse gas emissions data). Where they do not do so, or do so only partially, they must identify the requirements not met, provide their reasons and describe any steps under way or planned to fill the gap. In contrast to the current TCFD rules, issuers need not commit to a date for full compliance, although the FCA’s draft guidance encourages them to give one where it is known. Issuers that have not identified any relevant sustainability-related risks or opportunities must state so in their disclosures (see also “Guidance on the new rules” section below).

Transition plans. Issuers must state whether they have published a climate-related transition plan and, if so, where it can be found; if not, they must give their reasons. The FCA has made clear that the rule is a disclosure requirement only and does not oblige companies to produce a plan. This requirement does not apply to issuers in the following categories: (i) International secondary listed companies (UKLR 14); and (ii) depositary receipt issuers (UKLR 15).

Third-party assurance. Issuers must state whether external assurance has been obtained over their UK SRS disclosures (or any “explain” statements) and, if so, identify the provider, the disclosures covered, the level (e.g., reasonable or limited assurance) and standards of assurance and the location of any assurance report. No explanation is required where assurance has not been obtained. The FCA regards this information as helping investors assess how far they can rely on the disclosures, and will keep the case for mandatory assurance under review.

Location. All of the required disclosures must sit within the annual financial report, but the FCA does not prescribe a particular section. Issuers must signpost where the disclosures appear and may incorporate information by cross-reference to other published reports, provided the conditions set out in UK SRS S1 (Appendix B, paragraphs B45 to B47) are met.

Transitional reliefs

To ease implementation, issuers may, from the date of initial application: (i) omit Scope 3 emissions under UK SRS S2 in their first year of reporting; and (ii) limit their UK SRS S1 reporting to climate-related matters for the first two years (“climate-first” reporting). The UK SRS themselves also relieve issuers from giving comparative information in their first reporting period under the standards (or the first period after a relief expires) and, for one year, allow an issuer to keep using a greenhouse gas measurement method other than the GHG Protocol Corporate Standard where it applied that method in the preceding period. Issuers relying on the Scope 3 or climate-first reliefs must say so in their annual financial report but need not explain their reasons. All of the reliefs will have fallen away for accounting periods beginning on or after January 1, 2029. For accounting periods beginning before January 1, 2027, issuers may either continue to report on a TCFD basis or adopt the UK SRS early. UK SRS S1 and S2 disclosures must be made at the same time.

Key changes resulting from the consultation

The final rules are broadly in line with the FCA’s January 2026 consultation (CP 26/5). Key areas of change from the consultation include:

  • Mandatory climate reporting dropped. The FCA had proposed making UK SRS S2 climate disclosures (other than Scope 3 emissions) mandatory. Following feedback on the cost burden for smaller issuers and the potential impact on the attractiveness of the UK market, the final rules apply a “comply or explain” approach across all UK SRS requirements. The FCA also decided against size-based thresholds, citing the added complexity and loss of comparability. Issuers that choose to “explain” are reminded of their obligation under DTR 4.1.8R to disclose principal risks and uncertainties and should consider how any climate or sustainability risks among them are reflected in their reporting.
  • Signposting option for overseas issuers removed. International commercial companies with a secondary listing and depositary receipt issuers will be subject to the same “comply or explain” UK SRS requirements as other in-scope issuers. Under the consultation proposals, they were only required to refer to their home-jurisdiction disclosures, but respondents warned this could create an uneven playing field and incentives to downgrade a UK listing to avoid disclosure, and the FCA agreed the rules should go further. Where home-country reporting meets the UK SRS requirements, these issuers may rely on it and explain any gaps.
  • Early adopter restriction lifted. Issuers that choose to adopt the UK SRS early will be able to use the transitional reliefs, reversing the position originally proposed.

Guidance on the new rules

Having finalised the new reporting regime, the FCA is seeking comments on draft Primary Market Technical Note: UK SRS sustainability disclosures for listed companies (TN 803.1) published in Primary Market Bulletin 66. The draft guidance covers how much detail issuers should provide when complying or explaining, includes illustrative explanations, and addresses how an explanation affects an issuer’s ability to make the UK SRS statement of compliance. The FCA expects to finalise the guidance before the rules come into force and plans to update the market on its supervisory approach in the second half of 2027. Alongside the new guidance note, Primary Market Technical Note: Disclosures in relation to sustainability matters, including climate change (TN 801.4) will be updated, Primary Market Technical Note: TCFD aligned climate-related disclosure requirements for listed companies (TN 802.3) withdrawn and the existing TCFD guidance removed.

On October 19, 2026, the FCA held a webinar on the new rules and the proposed draft technical note, at which it clarified several aspects of its approach. In particular, the FCA confirmed that:

  • The “comply or explain” regime is not optional and there are no current plans to remove the option to explain in favor of full mandatory disclosure. 
  • Where an issuer chooses to explain, it need not respond to every paragraph of the UK SRS, but its explanation should be clear, concise and specific to its circumstances. A generic statement that data is unavailable will generally be insufficient. Nonetheless, no explanation is needed where climate or other sustainability matters are not financially material to the issuer.
  • The FCA will monitor disclosure quality, including through thematic reviews, in coordination with the Financial Reporting Council. 
  • The FCA also encouraged issuers to start preparations now by drawing on the practical considerations in Primary Market Bulletin 66, such as reviewing governance and internal controls, training and engaging with investors on their expectations.
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