Summary
The UK’s FCA (Financial Conduct Authority) Proposes IFRS‑Aligned Sustainability Reporting Requirements for Companies Beginning 2027, ESG Today consultation has been launched by the UK Financial Conduct Authority (FCA) to overhaul sustainability reporting for UK listed companies.
Key Details
- The FCA is proposing to replace existing TCFD-aligned climate reporting rules with requirements aligned to the UK Sustainability Reporting Standards (UK SRS), which are based on IFRS Sustainability Disclosure Standards (IFRS S1 and S2).
- The proposal would require companies to report climate-related disclosures aligned with UK SRS S2 on a mandatory basis from 1 January 2027.
- Scope 3 emissions reporting would initially be on a “comply-or-explain” basis (with a one-year transitional relief).
- Broader sustainability reporting (under UK SRS S1) would similarly transition to comply-or-explain, with phased implementation over subsequent years.
- FCA’s consultation is open until 20 March 2026, with a final policy expected later in 2026.
Timeline
- Consultation Period: Now to March 20, 2026
- FCA Policy Statement: Expected Autumn 2026
- Regime Effective From: Jan 1, 2027 (with staggered reliefs after)
Why It Matters
This move aligns UK sustainability disclosures with internationally recognised IFRS standards, enhancing comparability and consistency for investors. It also prepares UK markets for a more robust sustainability reporting regime beyond traditional climate risk disclosures.
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