Newsflash - FCA consults on mandatory reporting in line with UK Sustainability Reporting Standards – February 2026

The FCA has issued a consultation on bringing in mandatory reporting in line with UK Sustainability Reporting Standards replacing the current requirement to report on compliance with the TCFD framework. 

Our more detailed summary of the consultation paper is available here but the headline proposals are:

• Companies in the commercial companies, transition and non-equity shares and non-voting equity shares categories would move to mandatory reporting against UK SRS S2 Climate-related disclosures except for Scope 3 GHG emissions data (as a reminder TCFD reporting is currently on a ‘comply or explain’ basis).
• Scope 3 GHG emissions data would be reported on a ‘comply or explain’ basis.
• Certain sections of UK SRS S1 General requirements for disclosure of sustainability-related financial information which are relevant to the provision of climate-related disclosures under UK SRS S2 would be mandatory. 
• Reporting on non-climate sustainability risks and opportunities under UK SRS S1 is proposed to be on a ‘comply or explain’ basis.
• Commercial companies, transition and non-equity shares and non-voting equity shares categories would be required to explain whether a climate-related transition plan is disclosed and where it can be found.
• Under the proposed rules, companies in the secondary listing or depositary receipts categories would only be required to disclose the climate and sustainability reporting requirements applicable in their primary listing location or place of incorporation, or any requirements they voluntarily adopt.
• All companies in scope would be required to disclose whether they have obtained third-party assurance on sustainability disclosures. The FCA notes that the question of mandatory assurance will be returned to at a later stage but that they are keen to hear views on the benefits and costs of mandatory assurance requirements.
• It is proposed that the new UKLR would come into force for accounting periods beginning on or after 1 January 2027.

The consultation comment period ends on 20 March 2026. 

Related to this topic, on the same day, the government announced that they plan to progress with the establishment of a voluntary oversight regime and register for entities that offer third-party assurance services for sustainability-related disclosures. The FRC has been asked to establish an interim register by mid-2026 and to work with industry to develop eligibility criteria in due course. 

The interim register will comprise of a database of sustainability assurance practitioners with information about how they demonstrate adequate skills, knowledge and expertise for sustainability assurance engagements, validated by the FRC. Alongside this, it is intended that the regime will also include capacity building activities, such as issuing guidance and sharing best practice, to promote high standards for sustainability assurance engagements across the market.