FCA sustainability disclosure rules: What listed companies need to know

The Financial Conduct Authority (FCA) has published Policy Statement PS26/19, Aligning listed issuers’ sustainability disclosures with international standards, setting out changes to sustainability reporting requirements for listed companies.

The policy aims to improve the consistency and usefulness of sustainability information available to investors, while providing companies with flexibility to adapt to the new requirements.

The changes represent an important development in the UK’s sustainability reporting framework. Although the FCA has introduced transitional reliefs to support implementation, affected companies should begin assessing their readiness now.

• Source: Financial Conduct Authority (FCA) (2026) PS26/19: Aligning listed issuers’ sustainability disclosures with international standards. Available at: https://www.fca.org.uk/publications/policy-statements/ps26-19-aligning-listed-issuers-sustainability-disclosures-international-standards (Accessed: 14 October 2026)

Aligning with international sustainability standards

The policy aligns the FCA’s disclosure framework with the UK Sustainability Reporting Standards (UK SRS), comprising UK SRS S1 and UK SRS S2.

UK SRS S1 establishes general requirements for sustainability-related financial disclosures, while UK SRS S2 focuses specifically on climate-related risks and opportunities.

The standards are intended to help investors understand how sustainability-related matters may affect a company’s prospects. You can read more about those standards here.

Greater consistency in reporting should make it easier to compare information between businesses and assess how sustainability risks and opportunities are being managed.

A flexible comply-or-explain approach

A central feature of the FCA’s approach is the use of a comply-or-explain framework across UK SRS S1 and UK SRS S2. Rather than requiring every company to provide all disclosures immediately, the framework allows companies to explain where they have not complied with particular requirements and the steps they are taking to meet those disclosure requirements.

This approach provides flexibility during the transition to the new reporting framework. However, it does not remove the need for companies to understand the standards, identify relevant disclosure requirements and provide clear explanations where information is not disclosed and a roadmap to full disclosure. It is not, as some media reports suggest, a reason for not engaging with the standards.

Companies should therefore consider how they will document their approach and ensure that explanations are transparent, meaningful and supported by their circumstances.

Who is affected and when do the rules apply?

The FCA’s sustainability disclosure framework applies to specified categories of listed issuers. The policy extends the framework to international commercial companies with a secondary listing and to depositary receipts, while retaining exclusions for certain other securities and investment structures.

The new rules apply to accounting periods beginning on or after 1 January 2027, meaning the first reporting under the new requirements is expected in 2028.

Transitional arrangements provide additional time for companies to prepare. These include a one-year relief relating to Scope 3 greenhouse gas emissions disclosures and a two-year relief from UK SRS S1 requirements. Relief is also available for certain comparative information in the first reporting period.

These measures should ease the initial reporting burden, but companies will need to plan for the eventual end of the transitional periods. In particular, they should consider how sustainability data will be collected, validated and incorporated into reporting processes over time.

Climate transition plans and assurance

The policy also clarifies expectations regarding climate transition plans. Companies are not required under these rules to produce a transition plan. However, they must disclose whether they have published one. Where a plan exists, the company should explain where it can be accessed; where it does not, the company should explain why. This places emphasis on transparency, allowing investors to understand a company’s position and approach to climate-related planning.

In relation to assurance, companies must disclose whether their sustainability information has been subject to third-party assurance. Where assurance has been obtained, disclosures should identify the assurance provider and explain the scope, level and standards applied. Mandatory third-party assurance is not introduced by this policy.

Although assurance is not currently compulsory, companies should consider the reliability of their underlying data and the strength of their internal processes. Good documentation and appropriate controls can help support confidence in reported information.

Business implications

The framework is intended to improve the availability and comparability of sustainability information while managing the costs of implementation. For businesses, however, preparation will require more than simply updating annual report wording. It may involve reviewing existing sustainability disclosures, identifying gaps against the standards, improving data collection and establishing clear responsibilities for reporting.

Preparing for the changes

The FCA’s policy provides listed companies with a clearer framework for sustainability reporting, alongside transitional reliefs intended to support implementation. Nevertheless, the time available to prepare should be used constructively.

Companies should begin by assessing which requirements apply to them, reviewing their current disclosures and identifying gaps in data, processes and governance. They should also establish a timetable for addressing those gaps and consider how their reporting arrangements will evolve as transitional reliefs expire.

Ultimately, the success of the new framework will depend on companies providing sustainability information that is clear, consistent and useful to investors. Early preparation will help businesses manage implementation more effectively and build a stronger foundation for the new requirements. Contact us today if you would like assistance from one of our experts.