UK FCA Climate Reporting Shift: What PS26/19 Means for Listed Companies (2026)

Table of Contents

Mandatory Climate Reporting Abandoned Scope Expansion Key Elements Retained Broader Regulatory Trends Impact on Affected Companies

The UK Financial Conduct Authority (FCA) has published Policy Statement PS26/19, finalising its rules on sustainability disclosures for listed companies. The FCA had previously consulted on proposals to replace the existing TCFD-aligned disclosure regime with new requirements based on the UK Sustainability Reporting Standards (UK SRS). The final rules deviate from the consultation proposals in several significant ways.

Mandatory Climate Reporting Abandoned

The most notable change is the FCA's decision to abandon its proposal for mandatory reporting against UK SRS S2 (climate-related disclosures). Instead, all UK SRS disclosures, including climate disclosures under S2, Scope 3 emissions, and non-climate sustainability disclosures under S1, will apply on a uniform 'comply-or-explain' basis. This simplification reflects feedback from respondents who expressed concerns that mandatory climate reporting requirements would disproportionately burden smaller listed companies and potentially harm the international competitiveness of the UK listings market.

Scope Expansion

The FCA has also extended the comply-or-explain UK SRS requirements to international commercial companies with a secondary listing and depositary receipt issuers. Under the consultation proposals, these companies would have only been required to signpost any sustainability reporting requirements applicable in their home jurisdiction. This change addresses feedback that the original proposal could create an uneven playing field and reduce data comparability for investors.

Key Elements Retained

Other key elements of the final rules remain largely as consulted. Listed companies must disclose whether they have published a climate-related transition plan and, if not, explain the reason. They must also state whether they have obtained third-party sustainability assurance over their UK SRS disclosures. The implementation timeline is unchanged, with the rules applying to accounting periods beginning on or after January 1, 2027, and first reporting in 2028. Transitional reliefs are available, including a one-year deferral for Scope 3 emissions disclosures and a two-year deferral for non-climate disclosures under UK SRS S1.

Broader Regulatory Trends

The FCA's decision aligns with a broader trend of regulators moderating their stance on mandatory sustainability reporting. The EU has scaled back its CSRD and CS3D frameworks, and the US SEC is rescinding its climate disclosure rules. These finalised rules are part of a wider programme of reform to the UK's corporate reporting framework, including a separate consultation to simplify narrative reporting requirements under the Companies Act 2006, which may impact companies subject to both FCA and existing climate-related financial disclosure requirements.

Impact on Affected Companies

Companies should review their current TCFD disclosures against the UK SRS requirements and assess how the shift to a comply-or-explain regime affects their reporting strategy. Those preparing for mandatory UK SRS S2 compliance may need to reassess the scope and depth of their planned disclosures, while companies that would have been subject only to signposting requirements should evaluate their compliance readiness against the new rules.

For further updates and discussions on these final rules, companies are encouraged to contact the relevant professionals or follow the provided link.

Last Updated: 2026-10-29T07:56:11+07:00