FCA consults on UK Sustainability Reporting Standards aligned with ISSB

The Financial Conduct Authority released consultation paper CP26/5 on January 30, 2026, proposing the transition from TCFD to UK Sustainability Reporting Standards based on ISSB S1 and S2, effective January 1, 2027. Indian multinationals listed in the UK face mandatory UK SRS S2 climate disclosures, with Scope 3 and general sustainability information on a comply-or-explain basis.

The Financial Conduct Authority released consultation paper CP26/5 on January 30, 2026, outlining the next phase of the UK's sustainability reporting regime. The proposal transitions from the disbanded TCFD framework to ISSB standards, adopting UK Sustainability Reporting Standards (UK SRS) tailored from ISSB S1 and S2. A cornerstone is mandatory adoption of UK SRS S2 for climate-related disclosures, requiring listed companies to report detailed climate risks and opportunities, moving beyond the earlier comply-or-explain approach for core climate metrics.

The rules affect UK-listed companies, including multinational issuers and smaller listed entities. UK SRS S1, covering general sustainability-related financial information beyond climate, follows a comply-or-explain approach, giving smaller firms time to develop internal systems. Scope 3 emissions disclosures also remain comply-or-explain for now, reflecting value-chain data complexity. Issuers must disclose whether they have published a transition plan and provide a rationale if not, and whether sustainability reports underwent independent third-party assurance.

Indian companies listed in the UK should prepare data systems for mandatory UK SRS S2 climate reporting and assess transition-plan and assurance disclosure obligations. The proposed rules come into force on January 1, 2027, following a final policy statement in late 2026, so firms should track the consultation outcome. Aligning domestic reporting with ISSB benchmarks reduces compliance friction for multinationals while signalling how India-based issuers can prepare for converging global standards and investor demand for decision-useful data.

Key figure — Proposed effective date: January 1, 2027