FCA Confirms Mandatory UK SRS for Listed Companies: The September 2026 Policy Statement
Key Takeaways
- The Financial Conduct Authority published its policy statement in September 2026 mandating UK Sustainability Reporting Standards for premium and standard listed companies on the London Stock Exchange
- The requirement applies to financial years beginning on or after 1 January 2027, meaning the first UK SRS reports will be published in early 2028
- Implementation is phased: UK SRS S1 (general sustainability-related financial disclosures with a climate focus) applies first, with UK SRS S2 (detailed climate disclosures including Scope 3) following for financial years beginning on or after 1 January 2028
- AIM-listed companies are not mandated but are encouraged to adopt UK SRS voluntarily
- Limited assurance of UK SRS disclosures will be required from the second year of mandatory reporting (FY beginning January 2028)
What the FCA Policy Statement Confirms
The September 2026 policy statement is the culmination of three years of consultation, following the UK government’s 2023 announcement that it would adopt ISSB standards as the basis for UK sustainability reporting. The policy statement confirms:
- Scope: All companies with a premium or standard listing on the London Stock Exchange main market must comply. This covers approximately 1,200 companies
- Standards: UK SRS S1 and S2, endorsed by the UK Endorsement Board with UK-specific modifications
- Effective date: Financial years beginning on or after 1 January 2027
- Location: UK SRS disclosures may be included in the annual report or published as a separate sustainability report, provided they are published within 4 months of the financial year end
- Connectivity: UK SRS disclosures must be connected to the financial statements — the same accounting judgements, estimates, and assumptions should be reflected in both
Phased Implementation
The FCA has adopted a two-phase approach:
Phase 1: UK SRS S1 (FY beginning January 2027+)
UK SRS S1 requires disclosure of sustainability-related risks and opportunities that could reasonably be expected to affect the company’s cash flows, access to finance, or cost of capital. While S1 is broader than climate, in practice the initial focus is on climate-related risks given the maturity of climate data and methodologies. S1 requires:
- Governance processes for sustainability-related risks and opportunities
- Strategy for managing sustainability-related risks, including scenario analysis
- Risk management processes for identifying and prioritising sustainability-related risks
- Metrics and targets used to monitor and manage sustainability-related risks
Phase 2: UK SRS S2 (FY beginning January 2028+)
UK SRS S2 provides detailed climate-specific disclosure requirements, including:
- Scope 1, 2, and 3 GHG emissions (absolute and intensity)
- Climate-related transition and physical risk exposure
- Climate scenario analysis (qualitative and, where material, quantitative)
- Transition plan disclosure aligned with the TPT framework
- Internal carbon pricing, if used
- Climate-related targets, including progress towards them
Transition from TCFD Listing Rules
The FCA’s existing TCFD-aligned listing rules (LR 9.8.6R and LR 14.3.27R) will be superseded by UK SRS requirements. The transition provisions include:
- TCFD listing rules remain in force for financial years beginning before 1 January 2027
- Companies cannot simultaneously report under both TCFD listing rules and UK SRS — they must choose one framework per reporting year
- Early adoption of UK SRS is permitted from October 2026 onwards
- The FCA acknowledges that UK SRS is substantially consistent with TCFD but goes further in certain areas, particularly Scope 3 and transition plans
Comply-or-Explain Provisions
The policy statement includes limited comply-or-explain provisions for specific metrics:
- Scope 3 emissions (Phase 2): Companies may explain why certain Scope 3 categories are not reported if data is genuinely unavailable, but must demonstrate efforts to obtain the data and provide a timeline for future disclosure
- Scenario analysis: Qualitative scenario analysis is mandatory; quantitative scenario analysis operates on a comply-or-explain basis for the first two years
- Industry-specific metrics: Where UK SRS references SASB-derived industry metrics, companies may explain why a specific metric is not applicable to their business model
Importantly, the four pillars of disclosure (governance, strategy, risk management, metrics and targets) are fully mandatory with no comply-or-explain flexibility.
Assurance Requirements
The FCA has confirmed that limited assurance of UK SRS disclosures will be required from the second year of mandatory reporting:
- Year 1 (FY beginning January 2027): Assurance is not mandatory but companies are encouraged to obtain voluntary assurance
- Year 2 (FY beginning January 2028): Limited assurance is required for Scope 1 and 2 emissions and selected governance and risk management disclosures
- Future years: The FCA will consult on expanding assurance scope and potentially moving to reasonable assurance
Assurance may be provided by statutory auditors or specialist sustainability assurance providers, subject to quality management standards. The FRC is developing the UK sustainability assurance framework in parallel.
Interaction with Companies Act Reform
The FCA listing rules sit alongside Companies Act requirements. The government’s corporate reporting reform consultation (published March 2026) proposes that UK SRS disclosures satisfy the climate-related elements of the Companies Act strategic report requirements. This means companies complying with UK SRS should not need separate SECR or TCFD disclosures in their strategic report.
What Boards Must Do Before Year-End 2026
- Confirm UK SRS readiness: Assess whether your data systems, governance structures, and internal expertise are ready for Phase 1 reporting
- Approve the transition plan: If you have a transition plan, ensure it meets TPT framework standards and is board-approved before the first UK SRS reporting period
- Appoint internal leads: Designate responsibility for UK SRS compliance — this typically sits with the CFO or Company Secretary, with sustainability team support
- Engage your auditor: Discuss UK SRS assurance expectations with your statutory auditor or appoint a specialist sustainability assurance provider
- Start Scope 3 preparation: Even though Scope 3 is Phase 2, the data collection cycle means you need to start gathering supply chain emissions data during 2027 at the latest
- Review board competency: UK SRS governance disclosures require evidence of board-level climate competency. Consider whether training or advisory board appointments are needed
- Benchmark against peers: Review how comparable companies are approaching UK SRS readiness to calibrate your own preparation
Need Help Preparing for UK SRS?
Our sustainability reporting advisory team helps listed companies prepare for UK SRS compliance, build governance frameworks, and establish the data systems needed for credible climate disclosure.