UK FCA Finalises UK SRS Disclosure Rules for Listed Issuers

The FCA has confirmed that listed issuers currently subject to TCFD-aligned disclosure requirements will transition to UK SRS S1 and S2 reporting on a comply-or-explain basis for accounting periods beginning on or after 1 January 2027.

Key takeaways

• The UK Financial Conduct Authority (FCA) has finalised a new sustainability disclosure regime for listed issuers based on the UK Sustainability Reporting Standards (UK SRS), the UK-endorsed standards based on ISSB Standards IFRS S1 and IFRS S2.
• The FCA has adopted a comply-or-explain approach across both UK SRS S1 and UK SRS S2, replacing its existing TCFD-aligned disclosure framework.
• The new requirements will apply to accounting periods beginning on or after 1 January 2027, with first reports expected in 2028.
• The FCA has also published draft guidance setting out its expectations regarding the quality of disclosures and explanations under the comply-or-explain regime.

What Has Changed?

In Policy Statement PS26/19, the FCA confirmed that companies within the scope of the current TCFD-aligned rules will transition to reporting against UK SRS. The regime covers UK commercial issuers, transition category issuers, certain non-equity issuers, international commercial companies with secondary listings, and depositary receipt issuers.

A significant change from the FCA’s consultation proposal is the decision to apply the comply-or-explain approach across both climate (UK SRS S2) and broader sustainability disclosures (UK SRS S1). The FCA stated that it expects investor and broader market demand for sustainability-related information to support continued disclosure where climate and sustainability matters are relevant to a company’s business model and risk profile, while the comply-or-explain framework provides flexibility where disclosures are not prepared in accordance with UK SRS.

The FCA also revised its approach for international companies. Rather than simply directing investors to home-jurisdiction reporting, international commercial companies with secondary listings and depositary receipt issuers will also be subject to UK SRS reporting on a comply-or-explain basis.

FCA Consulting on Implementation Guidance

The FCA has also launched a consultation on supporting guidance to help issuers apply the new UK SRS comply-or-explain regime. This includes a new proposed technical note on UK SRS disclosures (TN 803.1), updates to existing sustainability disclosure guidance (TN 801.4), and the proposed deletion of guidance related to the previous TCFD-aligned framework (TN 802.3). Feedback is being sought until 28 October 2026, with final guidance expected before the rules come into effect.

How the Comply-or-Explain Approach Will Operate

The FCA’s draft Technical Note 803.1 provides additional clarity on what constitutes an acceptable explanation. Companies choosing not to report fully against UK SRS must identify the disclosures that have not been provided and explain the reasons for non-compliance. If steps are being taken to address reporting gaps in future, issuers must disclose this fact.

The FCA emphasises that explanations should be:

• clear, concise and understandable;
• issuer-specific rather than generic;
• sufficiently detailed to allow investors to understand the significance of omitted information.

Notably, the FCA does not require a separate explanation for every individual disclosure requirement that has not been met, but expects issuers to clearly identify the areas where reporting falls short of UK SRS requirements.

Transition Plans

Alongside UK SRS disclosures, issuers will continue to be required to state whether and where they have published a climate-related transition plan, or explain why they have not done so. The FCA references the IFRS S2 guidance on climate-related transition plan disclosures as a useful resource for issuers.

The FCA’s approach to transition plans differs from the comply-or-explain regime applicable to UK SRS disclosures. While UK SRS explanations must contain specified information regarding omitted disclosures and the reasons for non-compliance, the transition plan requirement focuses on transparency regarding whether a plan exists and where it can be accessed.

Assurance Disclosures

The new rules introduce additional transparency around third-party assurance. Issuers will be required to disclose whether sustainability information has been externally assured and, where applicable:

• the assurance provider;
• the disclosures covered;
• the level of assurance obtained;
• the standards used; and
• where the assurance report can be accessed.

Transitional Reliefs

To support implementation, the FCA has confirmed transitional reliefs:

• a one-year relief relating to Scope 3 emissions disclosures under UK SRS S2; and
• a two-year relief relating to UK SRS S1 disclosures.

These reliefs are intended to provide issuers with additional time to develop reporting systems and data collection processes while moving toward full alignment with the standards. During these relief periods issuers are not required to provide a comply-or-explain explanation in respect of the disclosures covered by the relevant relief.

Practical Implications for Issuers

The FCA’s final framework reinforces the UK’s alignment with the ISSB baseline while retaining flexibility through a comply-or-explain model. For issuers subject to the new requirements, the key immediate priority is to understand the scope, timing and disclosure expectations of the regime. Based on our assessment of the final rules, issuers should also consider the following implementation priorities:

• assessing readiness for UK SRS S1/S2 reporting;
• identifying disclosure gaps against UK SRS S1/S2 requirements;
• strengthening governance, data and control processes;
• evaluating transition plan disclosures and related governance arrangements;
• considering future assurance expectations and the robustness of supporting processes and controls; and
• monitoring evolving market practice and stakeholder expectations, recognising that investors and other stakeholders increasingly assess not only the quality of sustainability disclosures, but also evidence of underlying sustainability performance, business resilience and real-world outcomes that may influence long-term competitiveness, access to capital and stakeholder confidence beyond minimum regulatory requirements.

Market Context

The FCA noted that the existing TCFD-aligned regime, which also operated on a comply-or-explain basis, has supported high levels of disclosure, particularly among issuers for which climate and sustainability risks are relevant to their business models. The regulator also noted that more than 90% of respondents to its consultation supported replacing the TCFD-aligned climate disclosure requirements with UK SRS, highlighting the importance of international alignment and the focus on financially material information for investors.

ISS STOXX data covering 355 UK-listed companies indicates that 95% provide disclosures aligned with TCFD recommendations.

Related ISS-Corporate Insights

• For additional information on UK market readiness for UK SRS implementation, including climate disclosure practices, transition strategies and decarbonisation planning, see our March 2026 article on UK Sustainability Reporting Standards.

Sources:
PS26/19: Aligning listed issuers’ sustainability disclosures with international standards, Primary Market Bulletin No. 66, Draft Technical Note TN 803.1, Draft amendments to TN 801.4, and TN 802.3.