UK FCA consults on aligning listed issuers' sustainability disclosures with international standards

The UK Financial Conduct Authority (FCA) has published consultation paper CP26/5 on the evolution of its sustainability disclosure rules for listed companies, following the government's draft UK Sustainability Reporting Standards (UK SRS). The FCA's current requirements are aligned with the Task Force on Climate-related Financial Disclosures (TCFD), which disbanded in 2023. With over 40% of jurisdictions, including the UK, transitioning to the International Sustainability Standards Board (ISSB) Standards, the government is developing the UK SRS to tailor the ISSB framework for the UK market. The FCA therefore needs to update its regime accordingly.

The FCA proposes replacing its TCFD aligned listing rules with requirements for in scope listed companies to report against the UK SRS. The scope would remain broadly aligned with existing TCFD-based obligations and consistent with the ISSB's approach.

Key proposals include:

• Mandatory reporting against UK SRS S2 (covering climate‑related disclosures) but Scope 3 emissions would continue to be reported on a "comply or explain" basis.
• Non‑climate sustainability reporting (UK SRS S1) to be on a "comply or explain" basis, as this will be new for many issuers and may present challenges.
• Requiring companies to disclose: (i) where and whether they have published a transition plan or explain why not as investors find this information useful; and (ii) whether they have obtained third-party assurance on sustainability disclosures.

The FCA expects its proposed rules to come into force on 1 January 2027, with reporting against the UK SRS required for accounting periods beginning on or after that date. Transitional reliefs would allow staged implementation, with a one‑year deferral for reporting Scope 3 emissions under UK SRS S2 (from accounting periods beginning on or after 1 January 2028) and up to a two‑year deferral for non‑climate disclosures under UK SRS S1 (from accounting periods beginning on or after 1 January 2029). The deadline for responses is 20 March. Subject to feedback and finalisation of the UK SRS, the FCA intends to publish its final policy in autumn. In parallel, the FCA's Cost Benefit Analysis (CBA) Panel published its advice on the consultation's CBA.

Return to main website.