The United Kingdom has finalized the UK Sustainability Reporting Standards (UK SRS S1 and S2), making them available for voluntary use. In parallel, the Financial Conduct Authority (FCA) is consulting on proposals to replace its current Task Force on Climate-related Financial Disclosures (TCFD) requirements with rules aligned to UK SRS for listed organizations. TCFD has served as the de facto global standard for climate-related financial disclosures since its recommendations were published in 2017, and has been embedded in FCA Listing Rules since 2022, making its proposed replacement with UK SRS an important shift in the UK's disclosure landscape.
Subject to consultation outcomes, the FCA aims to publish a Policy Statement in autumn 2026, with new rules applying to accounting periods beginning on or after 1 January 2027. For many calendar-year reporters, that means first UK SRS-aligned annual reports would be published in 2028.This timeline applies to listed issuers in scope of the FCA's proposals, including commercial companies (UKLR 6), non-equity and non-voting equity shares (UKLR 16), transition category listings (UKLR 22), secondary listings (UKLR 14), and depositary receipts (UKLR 15), as set out in more detail below.
Understanding the UK SRS framework
The UK Sustainability Reporting Standards comprise two principal standards: UK SRS S1 (General Requirements) and UK SRS S2 (Climate-related Disclosures). These are the UK-endorsed adaptations of the International Sustainability Standards Board’s IFRS S1 and IFRS S2. The UK SRS S1 standard sets out overarching principles for disclosing sustainability-related financial information (governance, strategy, risk management, metrics & targets), while UK SRS S2 specifies climate-related disclosure requirements, including scenario analysis, climate resilience and greenhouse gas (GHG) emissions (Scopes 1, 2 and, when material or required, Scope 3).
UK SRS S1/S2 amendments relative to the ISSB Standards
Key differences between the UK SRS and the original ISSB standards include the following adjustments:
- Removal of first-year timing relief: UK SRS requires sustainability information to be published at the same time as the financial statements (no delayed first-year reporting).
- No embedded effective dates in the standards: Mandatory dates will be set by future FCA rules and/or government regulation.
- SASB industry guidance is optional: References are permissive (“may”) rather than mandatory (“shall”).
- Transitional reliefs for voluntary adopters: Climate-first sequencing and Scope 3 flexibility are not time-limited while reporting remains voluntary; time limits would be set if/when reporting becomes mandatory.
Entities in scope under FCA proposals
The FCA proposes to align UK Listing Rules with UK SRS and replace current TCFD-aligned rules for listed issuers in the following categories:
- UKLR 6: Commercial companies: The primary category, covering most equity issuers with a standard UK listing.
- UKLR 16: Non-equity and non-voting equity shares: Covering debt securities, preference shares, and similar instruments.
- UKLR 22: Transition category: Companies that moved from the previous Standard segment during the 2024 Listing Rules reform.
- UKLR 14: Secondary listings: Overseas companies with a secondary listing on the London Stock Exchange.
- UKLR 15: Depositary receipts: Instruments representing shares in foreign companies traded on UK markets.
UK SRS S1/S2: Proposed application and phasing under FCA CP26/5
The FCA sets out a phased approach to how UK SRS S1 and S2 would apply to in scope listed issuers:
- Mandatory climate disclosures aligned to UK SRS S2 for in-scope listed companies, with Scope 3 GHG emissions on a comply-or-explain basis and an optional one-year deferral.
- Wider sustainability disclosures under UK SRS S1 on a comply-or-explain basis, with a proposed two-year transitional relief.
- Organizations reporting under S2 would also apply the relevant foundational S1 principles that underpin climate disclosures (e.g., materiality, connected information).
- Transparency on transition plans and on whether third-party assurance has been obtained; no mandatory transition plan or assurance requirement at this stage.
Proposed timeline
- 25 Feb 2026: Final UK SRS S1/S2 published (voluntary use)
- 20 Mar 2026: FCA CP26/5 consultation closes
- Autumn 2026: FCA aims to publish final Policy Statement
- 1 Jan 2027: Proposed applicability to accounting periods beginning on/after this date
- 2028: For calendar-year reporters, first UK SRS-aligned annual reports expected to be published.
Preparatory measures for 2026 ahead of UK SRS application
Organizations can begin building readiness now by prioritizing actions in the following areas:
- Map materiality and assign ownership: Review UK SRS S1/S2 and allocate responsibilities across governance, strategy, risk management, and metrics & targets.
- Accelerate the reporting calendar: Put processes in place so sustainability information is ready concurrently with financial statements (reflecting removal of first-year timing relief).
- Prepare for comply-or-explain: Identify areas, especially Scope 3 or non-climate (S1) topics, where comply-or-explain may be needed, and draft robust rationales.
- Enhance Scope 3 and assurance readiness: Design finance-grade controls, documentation, and evidence trails; monitor developments on the UK’s assurance oversight regime.
- Upgrade scenario analysis and resilience assessments: Align methods and disclosures to UK SRS S2 expectations (e.g., scenario analysis and strategy resilience).
- Integrate transition plan expectations: Be transparent about whether a transition plan exists and where it is published, in line with FCA proposals.
- Strengthen board oversight: Update charters, risk appetite statements, and oversight mechanisms to reflect UK SRS S1 governance requirements.
The UK SRS introduces a unified, investor-focused framework for sustainability reporting and signals a decisive shift toward high-quality, globally interoperable disclosures.
