Quick Guide: Key Sustainability Disclosure Regimes: UK climate disclosure rules under Listing Rules

The UK has two main sets of rules for the disclosure of climate change issues by companies – the climate-related financial disclosures (“CFD”) regime under the Companies Act 2006 (“CA 2006”) and the climate-related financial disclosures (“CRFD”) regime under the UKLR. The CRFD regime applies to companies listed in the UK whether they are UK-incorporated or not (while the CFD regime is for UK-incorporated companies only). 

The government is consulting on how to implement the International Sustainability Standards Board (“ISSB”) standards (IFRS S1 and IFRS S2) into UK law in the form of new UK Sustainability Reporting Standards (“UK SRS”). These would introduce a wider sustainability disclosure regime that is focused not just on climate change issues. 

The Financial Conduct Authority (“FCA”) intends to consult in Q3 2025 on what changes will need to be made to the UKLR in light of the UK SRS.

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 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.

The UK government is seeking to implement the ISSB sustainability disclosure standards (IFRS S1 and IFRS S2) into UK law in the form of the UK SRS. 

The UK SRS will require new areas of disclosure and will require greater depth of reporting, which will involve additional costs for business.

The FCA intends to consult in Q3 2025 on what changes will need to be made to the UKLR to reflect the UK SRS.

See Quick Guide on the 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 blog post.

The Department for Business and Trade announced in October 2024 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.

• 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)

• Client briefing - UK corporate reporting 2024/25: recent developments and guidance for listed companies
• Quick Guide on CFD regime under Companies Act 2006 
• Quick Guide on UK SRS