UK FCA Proposes IFRS-Aligned Sustainability Reporting Rules for Listed Companies from 2027

The UK Financial Conduct Authority has launched a consultation on proposed rules that would require listed companies to implement UK Sustainability Reporting Standards aligned with IFRS S1 and S2 in their disclosures, with the new requirements set to come into force from January 2027. The proposal expands sustainability reporting obligations beyond the current TCFD-based climate disclosure requirements.

The new proposed rules would require in-scope listed companies to make mandatory climate-related disclosures in line with UK SRS S2, which broadly corresponds to the TCFD recommendations. For Scope 3 reporting, the FCA proposes a one-year transition relief followed by a comply-or-explain basis, acknowledging that access to quality Scope 3 data from value chain third parties remains difficult. Similarly, general sustainability disclosures under UK SRS S1 would benefit from a two-year transition relief implemented on a comply-or-explain basis.

The UK government released exposure drafts of UK SRS S1 and UK SRS S2 in June 2025, based on ISSB's global standards, with the finalised UK SRS expected in early 2026. The FCA's consultation is open until 20 March 2026, with a Policy Statement planned for autumn 2026 and rules taking effect from January 2027. The proposal does not require companies to disclose a transition plan, but does propose requiring disclosure of whether a plan has been published, and reasons if one has not.

The FCA's approach is designed to align UK listed company sustainability reporting with international standards, enabling overseas companies to avoid duplicate reporting obligations while giving UK investors access to clear and consistent sustainability risk information. The proposal also does not mandate third-party sustainability assurance, but proposes that companies disclose whether they have obtained such assurance. The UK's IFRS-aligned approach contrasts with the more prescriptive requirements under the EU's CSRD, though the two frameworks share common roots in the ISSB standards.

Key figure — January 2027