Navigating the UK’s new sustainability disclosure proposals for listed companies

The Financial Conduct Authority (FCA) has launched its anticipated consultation on a proposed UK Listing Rule to implement the updated and expanded UK sustainability reporting standards (UK SRS) which were the subject of a 2025 consultation. The FCA’s intention is to progress the rule in parallel with finalisation of the UK SRS itself, to accelerate implementation when both are resolved.

The objective of the rule is to align sustainability reporting by listed companies with the global baseline set by the International Sustainability Standards Board (ISSB), and with investor demand for relevant and robust disclosures. Under the proposals, the new UK SRS form of climate-related disclosures would become mandatory for listed companies’ accounting periods beginning on or after 1 January 2027, while disclosures of Scope 3 greenhouse gas emissions and wider sustainability topics would follow a “comply or explain” approach, with phased implementation in 2028 and 2029. While these specific FCA proposals target listed companies, the government has also stated its intention to consult on applying similar requirements to economically significant private companies, which is similar to the phased approach taken by the FCA and government when TCFD reporting was first introduced.

This blog outlines who would be in scope if the proposals are implemented, what would change, how the UK’s proposals compare internationally, and what companies should be doing now to prepare.

Who would report what and when?

The FCA proposes to replace the sustainability reporting requirements in the current listing rules, based on the recommendations of the near-obsolete Task Force on Climate-related Financial Disclosures (TCFD), with the new UK SRS, once the Government has finalised its consultation response on them. These new standards are derived from the work of the ISSB, which was launched formally at COP26 in Glasgow and which aims to establish a single global baseline for reporting. Like the existing TCFD listing rules, the FCA’s UK SRS proposals contain different obligations for companies with a primary UK listing (around 515 issuers in the commercial, non-equity and transition categories) and issuers with a secondary listing (currently 89). Obligations would be imposed on these listed companies (whether or not incorporated in the UK) to prepare and publish disclosures addressing their “reporting entity”, which is defined in paragraph 20 of the draft UK SRS as having the same scope as the group addressed by their consolidated financial statements.

UK primary-listed companies

The full regime is proposed to apply to companies in the main commercial, transition and non-equity listing categories, who would be required to include the following in their annual financial report:

• Mandatory climate reporting. For financial years beginning on or after 1 January 2027, disclosures aligned with UK SRS S2 would replace the current “comply or explain” TCFD regime.
• “Comply or explain” reporting. This applies to Scope 3 greenhouse gas emissions – the indirect greenhouse gas emissions that occur across a company’s entire value chain – and wider, non-climate sustainability topics under UK SRS S1. For these areas, companies can either provide the disclosures or explain why they have not provided them. A one-year relief defers the “comply or explain” duty for Scope 3 emissions until 2028, and a two-year relief pushes the same duty for wider sustainability topics to 2029.
• Transition plan and assurance transparency. A statement declaring whether they have a climate transition plan and where it can be found, and a statement confirming whether their disclosures have been independently assured. These requirements are also proposed to apply for accounting periods beginning on or after 1 January 2027.

Companies with a UK secondary listing or depositary receipts

To support the international competitiveness of UK markets, the FCA proposes a much lighter-touch approach for these companies, and proposes that it apply for accounting periods beginning on or after 1 January 2027. Instead of reporting against the UK SRS, these companies would instead only need to explain what sustainability disclosure requirements apply in their primary jurisdiction, any voluntary standards that they adopt, and where those disclosures can be found.

How the UK compares internationally

Globally, regulators outside of the EU are converging around the ISSB Standards, with around 40 jurisdictions progressing mandatory reporting. The FCA describes its own approach as “pragmatic and proportionate”, aiming to balance investor needs with the practical readiness of companies. In practice, that means giving UK issuers more flexibility than many other jurisdictions, particularly on Scope 3 and wider S1‑type disclosures.

The UK proposes a “comply or explain” approach to wider sustainability disclosures under UK SRS S1 that allows companies to explain their reporting gaps as they build up their data capabilities. Other jurisdictions are taking different paths: Hong Kong and Singapore have proposed mandatory S1‑aligned reporting for their largest issuers by 2028, and the EU’s Corporate Sustainability Reporting Directive (CSRD) already requires broader sustainability disclosures – where material – under the European Sustainability Reporting Standards (ESRS), although the Omnibus I Directive and proposed revisions to ESRS will narrow the scope and delay some elements. Australia and New Zealand, by contrast, are focusing initially on climate reporting with voluntary S1‑type disclosures. 

There are also variations in how each of these countries has applied reporting obligations to corporate groups. For example, Australia requires global groups to extract and publish information specific to Australian group entities, whilst other countries are considering allowing local subsidiaries to meet reporting requirements by cross-referencing global group reports. It remains to be seen how the UK will apply UK SRS reporting to private companies who are part of broader global groups (as this proposal only addresses listed companies, who are invariably ultimate parents), but the FCA’s more relaxed proposals for companies with only secondary listings in the UK suggest that a pragmatic approach may be applied. 

Approaches to Scope 3 reporting also vary across jurisdictions. In the EU, Scope 3 is required to be measured and disclosed under CSRD where material, with transitional relief allowing all initial reporters to omit Scope 3 disclosures for financial years beginning in 2024, 2025 and 2026. The Omnibus I Directive, agreed in December 2025 (see our summary), reduces the number of companies in scope but retains the requirement for those still covered. Australia has legislated for mandatory Scope 3 reporting from an entity’s second reporting year, meaning Group 1 entities must disclose for financial years beginning on or after 1 January 2026, supported by a statutory safe harbour running to June 2028. California’s SB 253 requires companies with more than USD 1 billion in revenue to report Scope 3 from 2027 (based on FY2026 data), with a safe harbour until 2030 (see our latest update). Hong Kong and Singapore are also phasing in Scope 3 and ISSB‑aligned disclosures: both expect their largest issuers to report from FY2026, while smaller issuers remain on a “comply or explain” or voluntary footing.

Next steps

Although the rules are not yet final, progress is being made and we suggest you consider the following:

• Engage with the consultation process: The FCA is seeking feedback on these proposals until 20 March 2026, giving you an opportunity to comment and influence timelines and scope.
• Conduct a strategic review of your existing reporting: Map your current disclosures against the draft UK SRS to identify gaps, especially around new industry-specific metrics. This analysis should lead to a clear roadmap for addressing Scope 3 data, using the one-year relief period to establish credible data sources, and will help you decide whether to publish a transition plan aligned with the UK Transition Plan Taskforce framework or prepare a robust justification for its absence.
• Think globally: For groups with a significant international footprint, design a global reporting baseline that meets the highest common denominator across all key jurisdictions to ensure consistency and efficiency.

The FCA’s proposals offer UK-listed companies a more flexible path than many of their international counterparts, but the direction of travel – towards replacing disparate UK sustainability frameworks with ISSB‑aligned reporting – is clear. We are monitoring developments closely and will keep you informed as the rules are finalised; please speak to your usual Freshfields contact if you would like to discuss what this means for your business.