On 30 January 2026, the Financial Conduct Authority (“FCA”) published a consultation1 on rules for listed companies’ sustainability disclosures, proposing a landmark shift from TCFD-aligned disclosures to a new mandatory reporting framework based on the UK Sustainability Reporting Standards (“UK SRS”). The consultation provides a defined scope and timeline for sustainability reporting, which is designed to boost the quantity, quality and comparability of financially material information and ensure stability and trust for markets.
Background
By way of a recap:
- during June - September 2025, the Department for Business and Trade (“DBT”) conducted a formal public consultation on the exposure drafts of UK SRS S1 and S2, which are UK-tailored versions of the global International Sustainability Standards Board standards;
- in December 2025, the UK Sustainability Disclosure Technical Advisory Committee provided their final report recommending such endorsement, with minor UK-specific adjustments;
- on 5 January 2026, the DBT formally updated the FCA, by letter, confirming that, among other things, the final UK SRS S1 and S2 are expected to be published in February 2026; and
- on 30 January 2026, the FCA launched its Consultation Paper CP26/5, requesting responses by 20 March 2026.
Scope
The FCA is proposing to replace its existing rules for listed companies’ sustainability disclosures - currently aligned with the Task Force on Climate-related Financial Disclosures (“TCFD”) - with the UK SRS framework for accounting periods beginning on or after 1 January 2027. The rules would apply to companies in the following listing categories:
- Commercial companies (UKLR 6)
- Non-equity shares and non-voting equity shares (UKLR 16)
- Transition category (UKLR 22)
- Secondary listing (UKLR 14)
- Depositary receipts (UKLR 15)
Key features of the proposal include:
- “Comply or explain” S1 reporting: Acknowledging that wider sustainability (non-climate) reporting (against UK SRS S1) will be new to many listed companies, the proposal maintains the option to make use of the two-year transition relief for disclosure of non-climate information (which may include, e.g., information on water and bio-diversity). If no such option is made, or after the transition period ends, a “comply or explain” approach would apply to reporting of sustainability-related risks or opportunities that could reasonably be expected to affect prospects.
- Mandatory S2 reporting: Given similarities with TCFD, there would be mandatory reporting of climate-related disclosures in line with UK SRS S2, while also referring to specified sections of UK SRS S1 that are relevant to the UK SRS S2 climate-related disclosures (with the exception of Scope 3 emissions data).
- Scope 3: Optional one-year transition relief, and from financial years beginning 1 January 2028, disclosure of Scope 3 emissions on a “comply or explain” basis.
- Transition Plan disclosures: Companies would be required to include a statement explaining whether they have disclosed a climate-related transition plan, and where it can be found. If they have not published a transition plan, they must state why not.
- Assurance: While independent assurance has not been mandated, companies are required to disclose whether their UK SRS disclosures have been subject to external assurance. If assurance has not been obtained, companies do not need to provide reasons for not doing so.
- Location: Disclosures must form part of annual reports rather than a separate sustainability document. The date of initial application would be the beginning of a listed company’s annual reporting period, which begins on or after 1 January 2027 but before 1 January 2028. Any available transitional reliefs would apply from such initial application.
Secondary listing and depositary receipts categories
For companies listed within the secondary listings and depositary receipts categories, the FCA proposes to remove the TCFD disclosure requirements that currently apply and instead require a statement to be included in annual reports setting out:
- any climate and / or wider sustainability disclosure requirements, including transition plan requirements, to which the company is subject in relation to equity shares in their primary overseas listing location (i.e., under the rules of the market of the qualifying home listing), or their place of incorporation, and signposting where the relevant disclosures and / or information can be found. This includes any requirements the company would be subject to were it not for any relief or exemption (in which case the nature of the relief or exemption must also be explained);
- any climate and / or sustainability-related disclosure standards or requirements, including relating to transition plans, voluntarily adopted in relation to any equity shares of the company which are admitted to trading, and signposting where the relevant disclosures can be found; or
- the fact that the company is not subject to any such climate or sustainability disclosure requirements and / or does not otherwise voluntarily follow any such climate or sustainability disclosure standards or requirements.
Transitional arrangements
In addition to the above, the FCA proposes a transitional provision to allow listed companies to either:
- continue to use the rules and guidance in place immediately before 1 January 2027 (i.e., the TCFD-aligned rules and guidance). This effectively acts as a “bridge” for companies with non-standard year-ends; or
- voluntarily comply with the proposed new UK SRS-related reporting requirements.
Where a listed company wishes to voluntarily comply with the proposed new rules early, the transitional reliefs in the UK SRS would not be available. This is because they only come into force for accounting periods beginning on or after 1 January 2027. This ‘all-or-nothing’ approach for early adopters ensures that if a company claims to follow the new global baseline early, investors receive the full dataset (including Scope 3 and UK SRS S1 matters) without the delay provided by the 2027 reliefs.
Future milestones
February 2026: Final UK SRS S1 and S2 published by DBT
20 March 2026: FCA consultation closes
Autumn 2026: Publication of final rules and policy statement by FCA
Financial periods beginning on or after 1 January 2027: Mandatory reporting begins for listed companies
1. Consultation Paper CP26/5