The UK's new ISSB-based sustainability reporting rules for listed companies

This blog was originally published on 3 February 2026 and updated on 8 October 2026. 

The UK’s new sustainability reporting listing rules have been finalised, replacing TCFD with the UK sustainability reporting standards (UK SRS), and will apply to financial years beginning on or after 1 January 2027. Details are set out in the Financial Conduct Authority (FCA)’s newly-published Policy Statement PS26/19. The objective of the new rules and the UK SRS is to align sustainability reporting by listed companies with the global baseline set by the International Sustainability Standards Board (ISSB) (which has subsumed TCFD), and with investor demand for relevant and robust disclosures. 

Under the final listing rules, the new UK SRS reporting standards will apply on a "comply or explain" basis across the same five in-scope listing categories as the current TCFD-based rules. All obligations will apply on a "comply or explain" basis. As noted above, the rules apply to accounting periods beginning on or after 1 January 2027, so the first reports will be published in 2028 – however, the inclusion of transitional relief to defer reporting on wider sustainability topics under UK SRS S1 by two years (to 1 January 2029), means that reporting on the 2027 financial year will be limited to climate reporting under UK SRS S2. There is also a transitional relief allowing the deferral of reporting on Scope 3 greenhouse gas emissions by one year (to accounting periods beginning on or after 1 January 2028).

The final rules are both lighter and broader than the regime set out in the FCA’s January – March 2026 consultation, under which S2 climate disclosures were proposed to be mandatory, save that companies with a secondary listing or depositary receipts were permitted to comply by signposting their home-jurisdiction reporting. Listed companies should also be aware that there is a draft Technical Note included in the FCA’s Policy Statement, linked above, which set out examples of reporting, and guidance on how the “comply or explain” principles should be interpretated in practice. This draft is open for consultation until 28 October 2026. 

While these specific FCA rules only apply to listed companies, the government’s Modernising Corporate Reporting consultation confirms that it will consider how UK SRS should be reflected in the Companies Act 2006, and applied to the reporting of large private companies. This would mirror the phased approach taken by the FCA and government when TCFD reporting was introduced, first for listed companies and then, through the Companies Act, for large private companies. Until changes to the Companies Act 2006 are proposed and implemented, UK SRS will only apply to listed companies in the UK, and private companies will continue to be required to report under the existing, TCFD-based framework. 

This blog outlines who is in scope, what will change, how the rules evolved from the consultation, how the UK's approach compares internationally, and what companies should be doing now to prepare.

Who will report what and when?

The FCA will replace the sustainability reporting requirements in the current listing rules, based on the recommendations of the near-obsolete Task Force on Climate-related Financial Disclosures (TCFD), with the new UK SRS. These new standards are derived from the work of the ISSB, which was launched formally at COP26 in Glasgow and which aims to establish a single global baseline for reporting. Like the existing TCFD listing rules, the FCA's UK SRS rules apply in largely the same way to companies in the commercial, non-equity and transition categories and issuers with a secondary listing or depositary receipts (around 570 issuers across the five categories, based on the FCA’s Official List as at 2 October 2026).

Obligations are imposed on these listed companies (whether or not incorporated in the UK) to prepare and publish disclosures addressing their "reporting entity", which is defined in paragraph 20 of UK SRS S1 as having the same scope as the group addressed by their consolidated financial statements.

In-scope companies will be required to include the following in their annual financial report:

• From 2027: climate disclosures. For accounting periods beginning on or after 1 January 2027, disclosures against UK SRS S2 (other than Scope 3 emissions) replace the current TCFD-aligned disclosures, on the same “comply or explain” basis. A company that does not make some or all of the disclosures must summarise the requirements it has not met, explain why, and set out any steps it is taking or plans to take to make them in future. The FCA had consulted on making these disclosures mandatory but concluded that, given feedback that full disclosure “is not yet feasible for certain smaller issuers”, a mandatory approach “may be disproportionately burdensome for small companies”.
• From 2028: Scope 3 emissions. A one-year transitional relief means that Scope 3 greenhouse gas emissions – the indirect greenhouse gas emissions that occur across a company's entire value chain – come within the “comply or explain” regime for accounting periods beginning on or after 1 January 2028.
• From 2029: wider sustainability topics. A two-year “climate-first” relief means that disclosures on wider, non-climate sustainability topics under UK SRS S1 come within the “comply or explain” regime for accounting periods beginning on or after 1 January 2029. A company that has not identified any relevant sustainability-related risks or opportunities must say so. A company relying on either relief must state this in its annual financial report, but no further explanation is needed during the relief period. Early adopters can use the reliefs again for their first accounting period beginning on or after 1 January 2027.
• Transition plan and assurance statements. From 2027, statements setting out where in the annual financial report the UK SRS disclosures can be found, whether any of them have been independently assured (and, if so, by whom, which disclosures, to what level and against which standards), and whether the company has published a climate transition plan (and, if so, where it can be found or, if not, why not). Neither assurance nor a transition plan is itself mandatory, although the FCA will keep the case for mandatory assurance under review. The transition plan statement does not apply to companies with a secondary listing or depositary receipts.

Bringing secondary-listed companies into the full regime is the most striking change from the proposal set out in the consultation. To support the international competitiveness of UK markets, the FCA had originally proposed a much lighter-touch approach – just explaining what sustainability disclosure requirements apply in their primary jurisdiction, any voluntary standards that they adopt, and where those disclosures can be found. That proposal did not survive consultation. Some respondents warned that it would let issuers from jurisdictions with no sustainability reporting requirements disclose nothing and might even tempt UK companies to downgrade to a secondary listing or use depositary receipts to sidestep the full regime. The final rules instead mirror the current approach to TCFD: where home-jurisdiction reporting aligns with the outcomes of UK SRS, these issuers may rely on it to reduce duplication, but they must explain any gaps.

How the UK compares internationally

Globally, regulators outside of the EU are converging around the ISSB Standards: the IFRS Foundation, as of 24 September 2026, has identified 37 jurisdictions that have adopted, or are moving to adopt, them, although approaches to implementation differ. The FCA said in consultation that it wanted to balance investor needs with the practical readiness of companies; its policy statement cites “proportionality, market readiness and UK competitiveness concerns”. In practice, that means giving UK issuers more flexibility than many other jurisdictions, particularly on Scope 3 and wider S1-type disclosures, and now on climate disclosures too.

The UK has adopted a “comply or explain” approach to climate and wider sustainability disclosures under UK SRS S1 and S2 that allows companies to explain their reporting gaps as they build up their data capabilities. Other jurisdictions are taking different paths: Hong Kong already requires climate reporting from its largest issuers and plans to extend this to full S1- and S2-aligned reporting by 2028, while Singapore's ISSB-based requirements cover climate only and so far apply just to Straits Times Index constituents, with other listed issuers following from FY2028 or FY2030. The EU’s Corporate Sustainability Reporting Directive (CSRD) already requires broader sustainability disclosures – where material – under the European Sustainability Reporting Standards (ESRS), although the Omnibus I Directive has narrowed the scope and delayed some elements, and simplified ESRS will apply from 2027. Australia, by contrast, is focusing initially on climate reporting with voluntary S1-type disclosures, while New Zealand’s climate standards remain TCFD-based, although its standard setter has proposed moving to an IFRS S2-based standard, harmonised with Australia and mandatory from 2033.

There are also variations in how each of these countries has applied reporting obligations to corporate groups. For example, Australia requires global groups to extract and publish information specific to Australian group entities, whilst other countries are considering allowing local subsidiaries to meet reporting requirements by cross-referencing global group reports. It remains to be seen how the UK will apply UK SRS reporting to private companies who are part of broader global groups, as these rules only address listed companies, who are invariably ultimate parents.

Approaches to Scope 3 reporting also vary across jurisdictions. In the EU, Scope 3 is required to be measured and disclosed under CSRD where material, and the simplified ESRS give it no phase-in of its own. The Omnibus I Directive, in force from March 2026 (see our summary), reduces the number of companies in scope but retains the requirement for those still covered. Australia has legislated for mandatory Scope 3 reporting from an entity's second reporting year, meaning Group 1 entities must disclose for financial years beginning on or after 1 January 2026, supported by a modified liability regime protecting Scope 3 disclosures from private claims for financial years beginning before 2028. California's SB 253 requires companies doing business in California with more than USD 1 billion in revenue to report Scope 3 from 2027 (based on FY2026 data), although the implementing rules are still being written and the law remains subject to legal challenge. Hong Kong and Singapore both expect their largest issuers to report Scope 3 emissions from FY2026, while smaller issuers remain on a "comply or explain" or voluntary footing.

Next steps

Now that the rules are final, with less than three months until they take effect, we suggest you consider the following:

• Conduct a strategic review of your existing reporting: Map your current disclosures against the final UK SRS to identify gaps, especially around new industry-specific metrics. This analysis should lead to a clear roadmap for addressing Scope 3 data, using the one-year relief period to establish credible data sources, and will help you decide whether to publish a transition plan aligned with the UK Transition Plan Taskforce framework or the IFRS guidance on transition disclosures referenced in the new listing rules, or prepare a robust justification for its absence. Decide, too, where you will explain rather than comply: the FCA sees a well-reasoned explanation as decision-useful in its own right, but where climate risk is among your principal risks, an "explain" will need careful handling.
• Engage with the consultation on guidance: as noted above, the FCA is seeking feedback on its draft Technical Note 803.1 on the "comply or explain" rules, published in Primary Market Bulletin 66, until 28 October 2026, giving you an opportunity to comment and influence how the FCA will assess whether an “explanation” is credible.
• Watch for overlap: Many listed companies already report on climate under both the listing rules and the Companies Act, and that will continue for now. The government's Modernising Corporate Reporting consultation, which closes on 30 November 2026, indicates that companies may choose to use their UK SRS S2 disclosures to meet both, and that the government will make clear that UK SRS is a national reporting framework for this purpose.
• Think globally: For groups with a significant international footprint, design a global reporting baseline that meets the highest common denominator across all key jurisdictions to ensure consistency and efficiency.

The FCA's rules offer UK-listed companies a more flexible path than many of their international counterparts, but the direction of travel – towards replacing disparate UK sustainability frameworks with ISSB-aligned reporting – is clear, and the FCA will be watching how many issuers choose to explain rather than comply. We are monitoring developments closely and will keep you informed as the guidance is finalised; please speak to your usual Freshfields contact if you would like to discuss what this means for your business.

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