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:

• the rules under the UKLR (known as the CRFD regime); and 
• the rules under the Companies Act 2006 (“CA 2006”) (known as the CFD regime). 

The CRFD regime/UKLR are administered by the Financial Conduct Authority ("FCA"). 

The CFD regime/CA 2006 are administered by central government and the Financial Conduct Authority ("FRC"). 

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

UK SRS S1 sets out the general requirements for sustainability-related disclosures. 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 changes to be made to the existing climate disclosure rules under the UKLR and the CA 2006:

• The FCA announced in September 2026 that it will replace the existing CRFD regime under the UKLR with new “comply or explain” rules to reflect the UK SRS starting in January 2027 (see our blog post) (discussed in more detail below).
• The UK government has said, in its Modernising Corporate Reporting consultation in September 2026, that it is reviewing what changes would need to be made to the CFD regime in the CA 2006 to reflect the UK SRS. That review is expected to conclude by spring 2027 and feedback from that review, and from the Modernising Corporate Reporting consultation, will inform future statutory changes (see our blog post). 

The government has indicated that companies reporting voluntarily in accordance with the UK SRS S2 - and UK listed companies reporting under UK SRS S2 under the revised UKLR - will meet their climate disclosure requirements under the CA 2006 (see para 158 in the government's Modernising Corporate Reporting consultation document and para 1.91 in the government's Response to its Consultation on the UK SRS).

The current CFRD regime applies 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.

However, the UKLR will change from 1 January 2027 to reflect the UK SRS (see “Future changes to reflect UK SRS” below). 

The CFRD 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 (TN/802.2) on TCFD-aligned climate-related disclosure requirements for listed companies, which provides further guidance on the FCA’s disclosure expectations.

However, these rules will change in January 2027 to reflect the UK SRS (see “Future changes to reflect UK SRS” below). 

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 CA 2006.

Howeve, 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.

In September 2026, the FCA announced in its Policy Statement PS26/19 that it will replace the existing TCFD-aligned climate disclosure rules under the UKLR with new “comply or explain” rules relating to the UK SRS. 

The new rules will apply to accounting periods starting on: 

• 1 January 2027 for climate reporting (under UK SRS S2);
• 1 January 2028 for Scope 3 reporting; and 
• 1 January 2029 for other sustainability (non-climate) reporting (under UK SRS S1). 

The FCA will apply a “comply or explain” approach to both climate disclosures (under UK SRS S2) and other sustainability disclosures (under UK SRS S1). 

In its consultation, the FCA had originally proposed making climate disclosures under UK SRS S2 mandatory. However, respondents to the consultation raised concerns that mandating UK SRS S2 would be disproportionately burdensome for smaller companies given the costs and resources involved, and questioned whether it would support the international competitiveness of companies operating in the UK. 

Under the revised UKLR, international commercial companies with a secondary listing and depositary receipt issuers will also report against the UK SRS on a comply or explain basis, in place of the consultation proposal to signpost reporting under their home jurisdiction.

The FCA reminds issuers of their existing obligation under DTR 4.1.8R to disclose principal risks and uncertainties facing the issuer. Where sustainability risks are among an issuer’s principal risks and uncertainties, issuers should consider how those are appropriately reflected in their reporting when choosing to ‘explain’ and not disclosing the information in line with UK SRS S1. In other words, 'explain' is not an off-switch: material sustainability risks that constitute principal risks must still be disclosed under DTR 4.1.8R.

The FCA is proceeding with its proposals as consulted on in all other areas, including:

• maintaining the requirement for climate-related disclosures and/or explanations, including on Scope 3 emissions, to be included in companies’ annual reports;

• requiring UK SRS S1 disclosures to be located within the annual financial report, without specifying a section;

• not requiring listed companies to produce transition plans or introducing requirements for the location of transition plans, but issuers will be required to disclose whether and where they have published transition plan (if they have one) or state why they have not published one;

• disclosing the sustainability assurance standards used, without requiring explanations where no assurance has been sought;

• requiring international companies to report against the UK SRS on a comply or explain basis; and 

• excluding investment entities from scope of the new rules and to continue applying climate disclosure requirements through the FCA's rules for asset managers in the ESG Sourcebook (see ESG Quick Guide: UK TCFD-aligned reporting requirements for asset managers).

The FCA is consulting on a draft Technical Note TN 803.1 (see Primary Market Bulletin 66), which will provide guidance on the level of detail to include when complying or explaining and examples. That consultation closes on 28 October 2026. 

For more information on the new rules, see our blog post: UK SRS: FCA confirms comply or explain approach for listed company climate disclosures. 

There are similar but separate rules on climate disclosures for asset managers and certain asset owners under the ESG Sourcebook, which are also administered by the FCA. 

For more information, see our ESG Quick Guide: UK TCFD-aligned reporting requirements for asset managers.

• 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
• Technical Note TN/802.2 on TCFD-aligned climate-related disclosure requirements for listed companies
• Policy Statement PS26/19: Aligning listed issuers’ sustainability disclosures with international standards and FCA press release - which explains the changes to the UKLR to reflect the UK SRS
• Primary Market Bulletin 66 and Draft Technical Note TN/803.1: UK SRS sustainability disclosures for listed companies - which contains guidance on how to apply the new ‘comply or explain’ rules - consultation on the draft TN closes on 28 October 2026

• UK: Government publishes final versions of UK SRS
• UK SRS: FCA confirms comply or explain approach for listed company climate disclosures
• UK: Government consults on modernising corporate reporting: sustainability takeaways
• ESG Quick Guide: UK climate disclosure rules under Companies Act 2006
• ESG Quick Guide: UK Sustainability Reporting Standards (UK SRS) 
• ESG Quick Guide: UK TCFD-aligned reporting requirements for asset managers
• Other ESG Quick Guides