On 30 January 2026, the Financial Conduct Authority (FCA) published a consultation proposing amendments to the UK Listing Rules to align in-scope listed issuers with the forthcoming UK Sustainability Reporting Standards (UK SRS). 

If adopted, this will replace the current TCFD (Task Force on Climate-related Financial Disclosures) aligned disclosure requirements with reporting aligned to a UK-endorsed version of the IFRS (International Financial Reporting Standards) Sustainability Disclosure Standards developed by the International Sustainability Standards Board (ISSB). For UK-listed companies, this signals a structural shift in how sustainability information is positioned within financial reporting. 

A move towards a consolidated reporting baseline

Over the past decade, sustainability reporting has evolved through a mix of voluntary frameworks, such as SASB (Sustainability Accounting Standards Board) and GRI (Global Reporting Initiative), and mandatory regimes including SECR and TCFD-aligned ‘comply or explain’ disclosures. While this has accelerated disclosure, it has also created fragmentation and limited comparability. 

The IFRS Foundation established the ISSB to create a global, investor-focused baseline for sustainability disclosures. The UK SRS represents the UK’s endorsement and adaptation of those standards for domestic use. 

The two core standards are: 

• UK SRS S1 – General Requirements for Disclosure of Sustainability-related Financial Information 

• UK SRS S2 – Climate-related Disclosures 

What do S1 and S2 require in practice? 

UK SRS S1 establishes the overarching framework. It requires companies to identify sustainability-related risks and opportunities that could reasonably affect financial position, performance or cash flows over the short, medium and long term. This introduces a clear financial materiality lens. Sustainability matters must be assessed in terms of enterprise value, including across the value chain. 

UK SRS S2 introduces climate-specific requirements. It retains the familiar governance, strategy, risk management, and metrics and targets structure from TCFD, but with more prescriptive content. Scope 1 and 2 emissions will be mandatory. Scope 3 emissions will remain on a ‘comply or explain’ basis. Companies will also be required to disclose climate resilience analysis and, where relevant, information about transition plans where they exist. 

The emphasis moves from narrative commitments towards quantified exposure and strategic response. 

What are the key FCA proposals? 

The FCA proposes embedding UK SRS-aligned requirements into the Listing Rules, with implementation for accounting periods beginning on or after 1 January 2027. 

Key elements include: 

• Mandatory climate disclosures under UK SRS S2 (excluding Scope 3). 

• Scope 3 emissions on a ‘comply or explain’ basis, with a one-year transitional relief. 

• Wider sustainability disclosures for financially material sustainability risks and opportunities under UK SRS S1 on a ‘comply or explain’ basis, with up to two years’ transitional relief. 

• Disclosure of whether a climate transition plan has been published, and if not, why not. 

• Disclosure of whether sustainability information has been subject to third-party assurance, including scope and level where obtained. 

It is important to note that ‘comply or explain’ is not a neutral position. Outside the formal transitional relief periods, companies that choose not to disclose will need to identify the relevant paragraphs, explain the omission, and outline planned steps towards compliance. 

What does this mean for listed companies? 

For UK-listed entities, this will increase both the scope and technical rigour of reporting. Climate disclosures move to a mandatory footing. Wider sustainability matters must be assessed through a financial materiality lens. 

Governance structures will need to demonstrate clearer oversight, particularly where sustainability assumptions intersect with financial reporting. Audit committees are likely to play a more active role. 

Strategically, climate resilience analysis under S2 must align with capital allocation, asset lives and long-term planning assumptions. Financially material sustainability risks under S1 will need to be integrated into business strategy and documented accordingly. 

Risk management frameworks will need to incorporate sustainability risks formally, with defensible methodologies supporting materiality judgements. 

Metrics and targets will require a stronger methodological underpinning. Emissions data, particularly Scope 3, where disclosed, must be supported by robust calculation approaches. Targets must be measurable, linked to strategy and transparently tracked over time. 

Operationally, this will require closer coordination among sustainability, finance, risk, and legal teams, along with strengthened data systems and internal controls. 

A final draft of the UK SRS is expected at the end of February 2026, with the FCA intending to finalise the Listing Rule amendments in Autumn 2026. Listed companies should begin assessing governance, risk and data gaps now, ahead of anticipated implementation in 2027. We will publish a further insight once the final UK SRS standards are released, outlining the detailed disclosure requirements and practical implications for implementation.  

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