In brief
The FCA has published several important updates for listed companies stemming from its Primary Market Bulletin (PMB) 66, including:
- Policy Statement 26/19: Aligning sustainability disclosures with international standards (PS 26/19), setting out finalised rules requiring in-scope listed companies to adopt a “comply or explain” approach to disclosing against the UK Sustainability Reporting Standards (UK SRS). The FCA also published Primary Market Bulletin (PMB) 66, proposing a new Technical Note (TN 803.1) to guide listed issuers on the expected level of detail of their sustainability disclosures, with feedback due by 28 October 2026; and
- The FCA’s observations on the relationship between cyber incidents and inside information disclosures, providing further guidance on cyber disclosures for listed companies following the FRC’s recent Cyber Provision 29 Guidance.
In more detail
Background on new sustainability disclosures
Issuers in the commercial companies listing category are currently required to disclose in their annual reports on a “comply or explain” basis against the Task Force on Climate-related Financial Disclosures (TCFD). Following the disbandment of TCFD in late 2023, the IFRS Foundation assumed responsibility for monitoring climate-related disclosures and published two IFRS Sustainability Disclosure Standards (SDS): IFRS S1 (general requirements) and IFRS S2 (climate-related disclosures).
In February 2026, following a consultation, the UK government published the finalised UK Sustainability Reporting Standards, comprising UK SRS S1 (general requirements) and UK SRS S2 (climate-related disclosures). The FCA subsequently published Consultation Paper 26/5 (CP 26/5), proposing to replace the existing TCFD-aligned disclosure requirements with new rules for listed issuers to report against UK SRS S1 and S2.
The FCA previously proposed to mandate UK SRS S2 disclosures in annual reports (with Scope 3 greenhouse gas emissions to be disclosed against on a “comply or explain” basis) and to require “comply or explain” disclosures against UK SRS S1.
Final rules under PS 26/19
In a key departure from its prior position under CP 26/5, PS 26/19 does not implement UK SRS S2 on a mandatory basis. Instead, it introduces a uniform “comply or explain” approach across all UK SRS disclosures, including Scope 3 greenhouse gas emissions. The FCA notes that this approach supports consistent, decision-useful disclosures. PS 26/19 also broadens the reporting scope by requiring international commercial companies with a secondary listing and depositary receipt issuers to disclose against UK SRS on a “comply or explain” basis.
Key points in PS 26/19 for listed companies to be aware of include:
- Location of disclosures: In-scope issuers must include UK SRS disclosures within their annual financial report. Cross-referencing to other publicly available documents is permitted, provided the information is clearly identified and readily accessible.
- Climate transition plans: Issuers in the commercial companies, non-equity shares and non-voting equity shares, or transition categories are not required to produce climate-related transition plans but must disclose whether they have published one and, if so, where it can be accessed, or explain why they have not done so.
- Third-party assurance: In-scope companies must state whether they have obtained voluntary third-party sustainability assurance over their UK SRS disclosures and, where obtained, disclose the assurance provider, scope, level, standards applied and location of the assurance report (if published).
- Implementation timeline: The new rules apply to accounting periods beginning on or after 1 January 2027, with first reporting expected in 2028. Transitional relief of one year applies for Scope 3 emissions disclosures and two years for UK SRS S1 (non-climate) disclosures. Issuers relying on these reliefs must disclose that reliance but need not provide an explanation. PS 26/19 includes a helpful implementation timeline graphic which companies may find useful.
Additional FCA guidance on “comply or explain” regime via a Technical Note
The FCA is also consulting on Technical Note TN 803.1, setting out expectations on the level of detail issuers should provide in their UK SRS disclosures, including when choosing to “explain”. Key proposed provisions include:
- Disclosures must cover climate-related and wider sustainability-related risks and opportunities that could reasonably be expected to affect issuers’ cash flows, access to finance or cost of capital over the short, medium or long term, and should be clear, concise and avoid generic language.
- Where an issuer does not fully comply with UK SRS, its explanation must include:
- For UK SRS S2, a summary of the disclosure requirements not met, or for UK SRS S1, a statement on the sustainability-related risks and opportunities not disclosed;
- The reasons for non-compliance; and
- If applicable, any steps the issuer is taking or plans to take to make the disclosures in future.
- Issuers disclosing in full accordance with UK SRS S2 and/or S1 must make an explicit, unreserved statement of compliance. An issuer that “explains” in respect of any part of a standard cannot make such a statement for that standard.
Practical considerations for listed issuers on new sustainability disclosures
PMB 66 sets out practical steps the FCA encourages listed issuers to take in advance of the new sustainability rules applying, including to:
- Familiarise themselves with the new UKLR requirements, UK SRS and the proposed Technical Note TN 803.1;
- Identify financially material sustainability-related and climate-related risks and opportunities;
- Review existing governance arrangements to ensure they are fit for purpose;
- Integrate sustainability-related and climate-related risks and opportunities within corporate strategy and assess business model resilience;
- Develop the data infrastructure, metrics and targets necessary for UK SRS disclosures; and
- Engage with investors to understand their disclosure expectations.
The FCA recognises that implementation will be an ongoing process and intends to focus initially on helping companies understand the new requirements ahead of first reporting in 2028. It has indicated it will provide updated information on its supervisory approach in H2 2027 and will continue to work with the FRC, the Government and other regulators to ensure a coherent UK supervisory framework.
PMB 66 cyber and inside information disclosures
The FCA acknowledges that cyber incidents by their nature make it difficult to assess disclosure obligations as they are unexpected, complex and fast moving. PMB 66 includes a number of observations from the FCA on how companies are handling cyber incidents in the context of their inside information disclosure obligations, including:
- The fact that there has been a cyber incident does not mean that there is inside information given materiality considerations. The FCA notes that it would be prudent to assume initially that a cyber incident constitutes inside information, and then assess the scale and nature of the incident as well as the data involved and any reputational impact;
- As permitted under DTR 2.2.9(G), where a listed company is faced with an unexpected situation, a short delay of the disclosure of inside information may be acceptable whilst the situation is clarified. In such cases, a holding announcement should be published. The FCA acknowledges this regime may be useful for listed companies given the nature of cyber incidents;
- The regime governing delayed disclosures of inside information may come into play for cyber incidents involving ongoing negotiations with hackers, but only where the confidentiality criteria in UK MAR Article 17(4) can be satisfied; and
- PMB 66 also provides important guidance for listed companies on how regulatory and legal disclosure obligations owed to governmental bodies and regulators interact with the inside information disclosure regime in the context of a cyber incident.
Lilly Imhof, Associate, has contributed to this legal update.