UK SRS for listed companies: What the FCA’s final rules changed
Written by: Cameron Wilson, Solutions Manager – Reporting | Last updated: 07.10.2026
On 30 September 2026 the FCA published its final rules for UK SRS reporting by listed companies on the Main Market, in Policy Statement PS26/19. The rules apply to accounting periods beginning on or after 1 January 2027, so the first reports will be published in 2028. They replace the current climate reporting rules for listed companies, which are based on the TCFD framework, and could change a great deal about how listed companies report, bringing sustainability information much closer to financial reporting.
Most of what the FCA proposed in its January consultation, CP26/5, has made it into the final rules. The questions we are hearing from companies are practical ones. Who is in scope? What is different from the consultation in January? And what does it mean for the TCFD reporting they are doing right now? We answer each of these below, starting with what has changed since January.
What has the FCA changed since January?
Compared with CP26/5, the FCA says it is “simplifying the regime in two ways”:
Basis of reporting: the FCA has confirmed that both UK SRS standards, S1 on sustainability risks and opportunities generally and S2 on climate, will need to be reported on a ‘comply or explain’ basis, meaning companies either make each disclosure or explain why they have not. In the January consultation it had initially proposed making S2, the climate standard, mandatory. In practice, companies will keep doing what they do today under TCFD, but against both S1 and S2.
International companies: overseas companies whose main listing is in another country, but which also have a secondary listing in London, will now report against UK SRS too. So will companies whose shares trade in London through depositary receipts, which are certificates representing shares in an overseas company. In the FCA’s words: “We are therefore requiring international companies to report against UK SRS on a ‘comply or explain’ basis, which aligns with the current approach to TCFD.” CP26/5 had proposed that they simply point to the rules they follow at home. They can still rely on home-country reporting where it already meets UK SRS, but must explain any gaps.
This change only affects overseas companies whose main listing is in a different market. Overseas companies whose main listing is in
London already follow the same rules as UK companies, so nothing changes for them. One difference remains: companies with a secondary listing or depositary receipts do not have to make the transition plan statement, which we explain under ‘Transparency requirements’ below.
Alongside the final rules, the FCA is consulting on draft guidance on how to comply or explain, Technical Note 803.1, until 28 October 2026.
S2 staying on a comply or explain basis, as TCFD is today, is a step back from what the FCA proposed. But UK SRS still has real potential to bring sustainability reporting closer to the core of financial reporting, and I would urge companies to keep working towards full compliance.Cameron WilsonSolutions Manager – Reporting
What has stayed the same?
More or less everything else has gone through as proposed in CP26/5. The rules apply to companies listed in these categories:
Commercial companies: the main listing category for trading companies with shares on the Main Market, whether UK or overseas.
Transition: a closed category for companies that had a standard listing before the 2024 listing reforms.
Non-equity and non-voting shares: companies listing shares other than ordinary voting shares, such as preference shares.
Secondary listings: overseas companies whose main listing is in another country.
Depositary receipts: certificates traded in London that represent shares in an overseas company.
They do not apply to:
Investment funds: investment trusts and other closed-ended funds, and open-ended investment companies. The FCA covers these through its rules for asset managers instead.
Shell companies: companies set up to buy another business, with no substantial operations of their own.
Debt and other securities: issuers that list only bonds, securitised derivatives, warrants or options.
The timetable is also unchanged from CP26/5. Two optional reliefs give companies more time:
Scope 3 emissions: there is an optional one-year relief. This means companies do not have to disclose Scope 3 emissions for accounting periods starting in 2027. They must then report Scope 3, on a comply or explain basis, for accounting periods starting on or after 1 January 2028.
UK SRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information): there is an optional two-year relief. This means companies can report on climate only for accounting periods starting in 2027 and 2028. They must then report against S1, on a comply or explain basis, for accounting periods starting on or after 1 January 2029.
The only caveat to this is that companies using a relief must say so in their annual report, but the important difference to comply or explain is that there is no requirement to explain why. Outside the reliefs, where a company does not comply with a requirement, it must set out what is missing, why, and any steps it is taking or plans to take.
Transparency requirements
Two transparency requirements also went through as proposed, and neither requires companies to have anything new. On transition plans, the FCA states: “We are not requiring listed companies to produce transition plans.” Companies must state whether they have published one and where to find it, or, if not, why not.
Assurance is also voluntary. Companies must state whether they have obtained third-party assurance and, if so, who provided it, what it covered, the level of assurance and the standards used. If they have not, saying so is enough, as the FCA is “not requiring explanations in the absence of assurance being sought”. Calls to go further, by mandating transition plans or assurance, were not taken up.
How is UK SRS S2 different from TCFD?
S2 is built on the same four pillars as TCFD: governance, strategy, risk management, and metrics and targets. Companies that report well against TCFD will recognise most of it. The differences are in how much detail S2 asks for.
Financial quantification: TCFD asked companies to describe the impact of climate-related risks and opportunities on their business, strategy and financial planning, which was often answered in narrative. S2 asks for the “current financial effects” and “anticipated financial effects” of climate-related risks and opportunities on financial position, performance and cash flows, quantified where possible. That includes identifying any climate-related risks that could materially change the value of assets or liabilities within the next year. Where a company can’t give numbers, it must explain why, describe the effects instead, and point to the lines in the financial statements likely to be affected.
Emissions: TCFD asked for Scope 1 and 2 emissions, and Scope 3 “if appropriate”. S2 requires Scope 3, after the one-year relief, including which of the GHG Protocol’s Scope 3 categories are covered. Asset managers, banks and insurers must also give additional information about their financed emissions. Scope 1 and 2 must be measured using the GHG Protocol, with Scope 2 on a location-based basis, and split between the consolidated group and other investments such as associates and joint ventures.
Industry-specific metrics: S2 asks for metrics “associated with one or more particular business models, activities or other common features that characterise participation in an industry”. TCFD only offered supplementary guidance for certain sectors. Companies may use the ISSB’s industry-based guidance as a starting point, but in UK SRS this is optional.
What does UK SRS S1 add?
S1 is new territory for most listed companies. It asks companies to report on any sustainability-related risk or opportunity, beyond climate, that “could reasonably be expected to affect the entity’s cash flows, its access to finance or cost of capital over the short, medium or long term”. Depending on the business, that could mean water, nature, the workforce or the supply chain.
S1 applies a financial materiality test, where information is material if leaving it out “could reasonably be expected to influence decisions” that investors and lenders make. To help identify these risks and opportunities, S1 allows companies to use the industry topics in the SASB Standards. The structure is the same four pillars as S2: governance, strategy, risk management, and metrics and targets.
Most of this is not new to listed companies, which already model severe but plausible scenarios for their viability statements and principal risks and uncertainties, many of which have sustainability connections. If a financial materiality assessment identifies a talent shortage as a risk, most finance teams already understand what that could cost, from higher recruitment and wage costs to revenue lost through unfilled roles. UK SRS asks companies to connect that analysis to the sustainability risk and disclose it. S1 itself uses a similar example of a business that depends on a specialised workforce.
With the two-year relief, S1 reporting applies to accounting periods starting on or after 1 January 2029, giving companies two reporting cycles to prepare. The first step is a financial materiality assessment.
What does this mean for companies?
For this year’s report, nothing changes. Accounting periods that began before 1 January 2027 stay on the current TCFD rules for listed companies. For a company with a 31 December year end, 2027 is the first UK SRS year, reported in 2028.
Comply or explain means companies will need to decide, disclosure by disclosure, whether they can comply or need to explain. The more gaps that are closed before the first UK SRS report, the less there is to explain.
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