ESG Quick Guide: UK climate disclosure rules under Listing Rules

At present, the UK has two main sets of rules for the disclosure of climate change issues by companies - one under the UK Listing Rules (“UKLR”) and one under regulations made in 2022 under the Companies Act Act 2006 ("CA 2006"). Companies which are incorporated and listed in the UK are required to comply with both sets of rules. 

In February 2026, the UK government formally endorsed the sustainability disclosure standards developed by the International Sustainability Standards Board ("ISSB") - IFRS S1 and S2 - for voluntary use in the UK, with some minor amendments. This was done via the UK Sustainability Reporting Standards ("UK SRS"). 

UK SRS S1 sets out the general requirements for sustainability-related disclosures. And UK SRS S2 sets out requirements for climate-related disclosures. The UK SRS therefore cover all aspects of sustainability – not just climate change. The UK SRS will require (when they become mandatory) new areas of disclosure and will require greater depth of reporting, which will involve additional costs for business.

The UK SRS will require changes to be made to the existing regimes under the UKLR and CA 2006. 

The Financial Conduct Authority ("FCA") is consulting on changes to the UKLR to reflect the UK SRS and the government has said it will consult (on a date TBD) on changes to the CA 2006.

In the meantime, even if an entity did decide to voluntarily disclose against the UK SRS, the existing climate-related reporting regimes (under the CA 2006 and UKLR) continue to apply. 

Mandatory – but on a “comply or explain” basis 

Companies with a listing of equity shares in the equity shares (commercial companies) category of the UKLR

Listing Rules requiring different types of UK listed company to provide information about CRFD were originally introduced in 2021 and 2022. 

These requirements were carried over into the latest version of the Listing Rules -see UKLR 6.6.6R(8), effective from 29 July 2024.

This regime is overseen by the FCA. 

UKLR 6.6.6R(8) requires UK listed companies to state in their annual financial report whether they have made CRFD that are consistent with the Task Force on Climate-related Financial Disclosure (“TCFD”) recommendations and recommended disclosures and where these disclosures can be found. 

Although UKLR 6.6.6R(8) means listed companies can provide CRFD information on a “comply or explain” basis, they  would ordinarily be expected to make TCFD-aligned disclosures rather than explain why they have not complied. 

If the company has not included some, or any, TCFD-aligned financial disclosures in its annual report, it must:

• Indicate the recommendations for which it has not included disclosures and explain the reasons for this.
• Describe the steps that it is taking in order to be able to make these disclosures.
• Set out the timeframe within which it expects to be able to make these disclosures.

UKLR 6.6.8G to UKLR 6.6.12G provide guidance on determining whether the CRFD are consistent with the TCFD recommendations and recommended disclosures.

In April 2025, the FCA published a Primary Market Technical Note on TCFD-aligned climate-related disclosure requirements for listed companies (TN/802.2), which provides further guidance on the FCA’s disclosure expectations.

The FCA  has powers to investigate breaches of the UKLR and to take action as a result, which may include public censure and/or fines.

The CRFD regime in the UKLR and the CFD regime under the CA 2006 are similar but not identical.

According to the government’s guidance on the CFD regime, UK companies with more than 500 employees that are within the scope of the CRFD rules under the UKLR will be subject to both the CFD under the CA 2006 and the CRFD under the UKLR. 

The guidance states that as both sets of requirements are based on the TCFD recommendations, there is a high degree of consistency between them. It points out that the main difference between the two regimes is that the UKLR directly reference the TCFD recommendations while the 2022 Regulations made under the CA 2006 are aligned with the TCFD recommendations but do not directly reference them.

The guidance also advises that where a UK listed company is subject to both regimes, disclosure in accordance with the CRFD is likely to involve the use of similar information to the disclosure required by the CFD and is therefore normally likely to meet the requirements of the Companies Act 2006.

Despite the significant overlap, there are some key differences between the two regimes, in particular: 

• CRFD disclosures required by the UKLR are more detailed, are provided on a “comply or explain” basis, and can be presented outside the annual report.
• With CFD, all the required disclosures should be provided unless one of the available exemptions applies, and all the disclosures should be presented in the annual report.

Changes to UKLR

The FCA is consulting on changes to the UKLR to make disclosures in line with the UK SRS mandatory for listed companies (see our blog post). 

That consultation closed on 20 March 2026. The FCA intends to finalise its rules in 2026, with a view to them applying to accounting periods beginning on or after 1 January 2027.

In its consultation, the FCA proposed the following changes to the UKLR to reflect the UK SRS:

For accounting periods beginning on or after 1 January 2027:

• Climate only reporting: The FCA is proposing to replace TCFD reporting with mandatory ISSB-based climate reporting in line with UK SRS S2 (the climate reporting standard) and the sections of UK SRS S1 relevant to climate disclosures (with the exception of disclosures relating to Scope 3 emissions (see below)).  
   
• Transition plans: Noting that the UK government has been consulting on whether to mandate transition plans, the FCA’s position is that it does not consider it appropriate at this stage to mandate transition plans. Instead, the FCA is proposing to replace their existing TCFD-based guidance on transition plan disclosures with:
  • a “disclose or explain” which would require listed companies to include a statement in their annual report explaining whether they have disclosed a climate-related transition plan, and where it can be found. If they have not published a transition plan, the FCA propose that companies be required to state why not; and
  • guidance stating that listed companies which produce a climate-related transition plan may wish to use the IFRS Educational Material, to encourage international comparability.
     
• Assurance of disclosures: The FCA’s proposals include a requirement for listed companies to specify in their annual report whether or not they have obtained third-party sustainability assurance over their UK SRS disclosures, and, among other matters, the assurance standards used. 

For accounting periods beginning on or after 1 January 2028:

• Scope 3 emissions reporting: The FCA is proposing that Scope 3 emissions reporting required by UK SRS S2 be on a “comply or explain” basis only. 

For accounting periods beginning on or after 1 January 2029:

• Non-climate sustainability reporting: The FCA is proposing that UK SRS S1 (the non-climate sustainability reporting) (except where relevant to climate disclosures) be on a “comply or explain” basis only. Where a listed company chooses to “explain” and the listed company has identified sustainability-related risks or opportunities that could reasonably be expected to affect their prospects, they would need to disclose in their annual report:
  • the relevant sustainability-related risks or opportunities;
  • the reasons for not including those disclosures; and
  • any steps being taken or planned to make those disclosures. 

Changes to CA 2006

The government has said it will consult (on a date TBD) on changes to the CA 2006 to make disclosure in line with the UK SRS mandatory for certain types of companies, including possibly private companies. 

The government has confirmed that its approach will be considered as a part of the broader reporting consultation - known as the Modernising Corporate Reporting ("MCR") programme - that it will be undertaking later in 2026.  

For more information, see ESG Quick Guide: UK Sustainability Reporting Standards (UK SRS).  

There are similar but separate rules on climate disclosures for asset managers and asset owners which are also administered by the FCA. The ESG Sourcebook introduced new TCFD-aligned disclosure rules for asset managers and asset owners that came into effect on 1 January 2023. For more information, see our ESG Quick Guide: UK TCFD-aligned reporting requirements for asset managers.

The government has made it clear that any decisions on the UK SRS need to be aligned with the government’s ambition to reduce the costs of regulation for business by 25%. The objective is to ensure that any new sustainability disclosure requirements generate decision-useful information for investors and other stakeholders, while not being overly burdensome for reporting entities to meet.

The Department for Business and Trade announced in October 20204 plans for an “ambitious” consultation in 2025 on further proposals to simplify and modernise the UK’s non-financial reporting framework, which is not limited to sustainability disclosures. Presumably this will be wrapped up as part of the government's MCR programme (discussed above). 

• UKLR 6.6.6R(8)
• UKLR 6.6.8G to UKLR 6.6.12G provide guidance on determining whether CRFD are consistent with the TCFD recommendations
• Primary Market Technical Note on TCFD-aligned climate-related disclosure requirements for listed companies (TN/802.2)

• UK: Government publishes final versions of UK SRS
• UK SRS: FCA proposes mandatory climate disclosures from 2027, except for Scope 3 emissions, for which it is "comply-or-explain" from 2028
• ESG Quick Guide: UK climate disclosure rules under Companies Act 2006
• ESG Quick Guide: UK Sustainability Reporting Standards (UK SRS)