FCA consultation on sustainability disclosures for listed companies

Why should I read this?

On 30 January 2026, the Financial Conduct Authority (FCA) published Consultation Paper CP26/5, setting out proposed changes to the climate and sustainability-related disclosure requirements for UK‑listed companies. The consultation forms part of the FCA's ongoing commitment to enhance the transparency, comparability and quality of sustainability‑related financial information in UK capital markets.

The FCA proposes to move from the current TCFD‑aligned disclosure regime to reporting aligned with UK Sustainability Reporting Standards (UK SRS). Subject to finalisation, most requirements would apply for financial years beginning on or after 1 January 2027.

What changes are proposed?

The FCA proposes replacing the existing TCFD‑aligned UK Listing Rule disclosures with requirements for:

• Mandatory reporting against UK SRS S2 (Climate‑related disclosures), with the exception of Scope 3 emissions, which would continue on a "comply or explain" basis.
• Wider sustainability (non‑climate) reporting under UK SRS S1 on a "comply or explain" basis. UK SRS S1 requires disclosure of sustainability‑related risks and opportunities that could reasonably be expected to affect a company's prospects.

Certain foundational concepts and reporting principles that underpin climate disclosures are contained within UK SRS S1, and companies reporting under UK SRS S2 would also be required to apply these elements.

Reminder: what are UK SRS?

UK SRS are intended to align UK sustainability reporting requirements with the inaugural International Sustainability Standards Board (ISSB) Standards, published in June 2023:

• IFRS S1 – General Requirements for Sustainability‑related Financial Disclosures.
• IFRS S2 – Climate‑related Disclosures.

IFRS S2 builds on the TCFD framework, while IFRS S1 establishes a broader baseline for sustainability‑related risks and opportunities. Following the disbanding of the TCFD, the ISSB has taken responsibility for ongoing monitoring.

In June 2025, the Government consulted on draft UK SRS S1 and S2, incorporating limited changes to tailor the ISSB Standards for the UK. The FCA consultation is based on these draft UK SRS and will be updated once the final versions are published. The Government is expected to publish the final UK SRS shortly.

Companies in scope

The proposed new rules would apply to companies in the following UK Listing Rule categories:

• Commercial companies (equity shares)
• Non‑equity shares and non‑voting equity shares
• Transition category companies

For issuers with a primary listing outside the UK (i.e. secondary listings and depositary receipts), the FCA proposes a transparency‑focused regime. These issuers would not report under UK SRS but would disclose the climate and sustainability reporting standards that apply in their home jurisdiction and any voluntary standards followed.

Transition plans and assurance

The FCA considers that mandating transition plans is a matter for Government policy, pending the outcome of the Government's 2025 consultation on transition‑plan regulation. Under the FCA's proposals, companies must include a statement in their annual report confirming:

• Whether they have published a climate‑related transition plan; and
• Where the plan can be found, or why no plan has been published.

Companies would also need to disclose whether any climate‑ or sustainability‑related information has been subject to third‑party assurance and, if so, identify the provider, the assurance level obtained, the assurance standard used and where the assurance report is located.

In parallel, the Department for Business and Trade has confirmed its intention to introduce a voluntary oversight and registration regime for sustainability assurance providers, with the Financial Reporting Council establishing an interim non‑legislative regime by mid‑2026, to be formalised through legislation when time allows.

Approach to implementation

Subject to the Government's final endorsement of UK SRS, the FCA intends the new rules to take effect from 1 January 2027, applying to accounting periods beginning on or after that date.

Chapter 8 of the consultation sets out further detail on the FCA's proposals for implementation and proposed transitional reliefs, including:

• The transitional reliefs embedded within the draft UK SRS (including a one‑year relief for Scope 3 emissions disclosures and a two‑year relief for non‑climate UK SRS S1 disclosures); and
• Additional UKLR transitional provisions reflecting variations in issuer accounting periods and supporting an orderly transition.

The Government has indicated the final timing and application of UK SRS reliefs will be set out in Regulations or FCA rules once the standards are finalised.

Next steps and recommended actions

The consultation remains open until 20 March 2026. The FCA intends to publish a Policy Statement in Autumn 2026, aligned to the final UK SRS.

Listed companies should now:

• Review their existing TCFD‑aligned climate disclosures in light of the proposed UK SRS framework.
• Assess their ability to comply with mandatory UK SRS S2 requirements and identify gaps in data, systems, controls or governance.
• Evaluate readiness to report under UK SRS S1 on a "comply or explain" basis.
• Review their approach to third‑party assurance, identifying which disclosures may warrant assurance and preparing to make the required statements.
• Continue to monitor developments as both the UK SRS and the FCA's final rules are published.

Further reading

• UK: Draft UK Sustainability Reporting Standards published – Eversheds Sutherland
• Next steps for the UK sustainability reporting framework
• CP26/5 – Aligning listed issuers' sustainability disclosures with international standards (FCA)