Framework Transition · TCFD Evolution
TCFD vs UK SRS: what changes as listed companies move to S2
UK SRS S2 keeps TCFD’s four-pillar structure and asks for more: scenario analysis under paragraph 22, structured Scope 3 disclosure, cross-industry metrics and financed emissions.
The TCFD to UK SRS transition is now set by the FCA’s final rules (PS26/19, 30 September 2026): listed companies in scope report against UK SRS on a comply-or-explain basis from 2027, finalising CP26/5.
Context
From recommendations to a standard
TCFD vs UK SRS is, for UK listed companies, a question about the FCA’s listing rules.
CP26/5 proposed that UK SRS S2 replace TCFD-aligned Listing Rule disclosures; the FCA’s final rules require listed companies in scope to report against UK SRS on a comply-or-explain basis for accounting periods beginning on or after 1 January 2027.
UK SRS S2 keeps TCFD’s four-pillar structure while adding detailed requirements that go beyond TCFD’s principles-based recommendations.
The Task Force on Climate-related Financial Disclosures was created by the Financial Stability Board in 2015 and established the four-pillar structure.
The TCFD was disbanded on 12 October 2023, and monitoring of climate-related disclosure adoption transferred from it in 2024.
The Financial Stability Board’s own request names the ISSB, while the TCFD’s own site names the IFRS Foundation; the primary sources do not agree on a single successor body.
Companies currently making the TCFD statement required by UK Listing Rules UKLR 6.6.6R(8) should prepare for significantly expanded disclosure under the FCA’s final rules.
Large companies (turnover over £500 million, or over 500 employees) already carry a mandatory climate-related financial disclosure duty under Companies Act 2006 sections 414CA and 414CB, inserted by SI 2022/31.
That duty sits alongside the FCA’s listed-company rules and does not depend on them.
How we got here
- 2015TCFD created by the Financial Stability Board
- Jun 2017TCFD final recommendations
Four pillars: governance, strategy, risk management, metrics and targets.
- 2021TCFD-aligned Listing Rule statement
Now UKLR 6.6.6R(8). TCFD implementing guidance updated in October 2021.
- 12 Oct 2023TCFD disbanded
Monitoring of disclosure adoption transferred in 2024.
- 25 Feb 2026UK SRS S1 and S2 published
Department for Business and Trade; voluntary use.
- 30 Sep 2026FCA final rules — PS26/19
UK SRS on a comply-or-explain basis for listed companies in scope.
- 1 Jan 2027UK SRS applies to listed companies
Accounting periods starting on or after this date.
Framework
Framework foundation and expansion
UK SRS S2 adopts TCFD’s four-pillar framework, but turns each pillar from high-level recommendations into specific disclosure requirements written as “shall” provisions.
IFRS S2, and therefore UK SRS S2, carries the TCFD architecture — the IFRS Foundation’s own description is “consistent with”, not “fully incorporates” — and then asks for industry-based metrics, planned use of carbon credits and financed emissions.
TCFD to UK SRS S2 Transition
Interactive comparison of requirements across the four-pillar framework
Board oversight (voluntary)
Principles-based recommendations for board oversight of climate-related risks and opportunities
Voluntary principlesRequirements
- Describe board oversight of climate risks/opportunities
- Describe management's role in assessing climate risks/opportunities
- General governance arrangements disclosure
Prescribed governance disclosures
Detailed requirements for governance body identification, skills assessment, and decision-making processes — the whole governance requirement sits in UK SRS S2 paragraph 6
Prescribed and detailedRequirements
- Identity and responsibility of oversight body (S2 para 6(a))
- Skills and competencies assessment (S2 para 6(a)(ii))
- Information flow and reporting processes (S2 para 6(a)(iii))
- Strategic integration and trade-offs (S2 para 6(a)(iv))
- Target oversight and performance monitoring (S2 para 6(a)(v))
- Management's role in governance (S2 para 6(b))
TCFD’s principles-based approach allowed companies to tailor disclosures to their circumstances while following broad guidance across the four pillars.
That enabled early adoption but created inconsistency in disclosure quality and comparability.
UK SRS S2’s standards-based approach prescribes specific requirements within each pillar, including cross-industry metrics, a scenario-analysis-based resilience disclosure, and detailed measurement-approach disclosures.
The UK SRS S2 standard builds directly on IFRS S2, which was developed to translate the TCFD recommendations into an international standard.
The IFRS Foundation states that companies applying IFRS S1 and S2 will meet the TCFD recommendations.
The TCFD to UK SRS transition is the move from principles-based climate disclosure to detailed standards-based reporting — on a comply-or-explain basis in both cases under the FCA’s listing rules.
More on the structure at UK SRS four pillars.
Pillar 1
Governance pillar evolution
TCFD’s governance recommendation focused on board oversight and management’s role in assessing and managing climate-related risks and opportunities.
UK SRS S2 paragraphs 5–7 turn that into specific disclosures about who oversees climate-related risks and opportunities, how, how often, and with what skills.
The shift is from TCFD’s “describe your governance approach” to UK SRS’s “disclose specific governance processes and decision-making mechanisms”.
Paragraph 6(a)(ii) requires disclosure of how the oversight body determines whether appropriate skills and competencies are available or will be developed — a requirement absent from the TCFD recommendations.
TCFD
Recommendation A: board oversight and management’s role, without prescriptive requirements for governance structures or reporting processes.
UK SRS S2
| Paragraph | Disclosure |
|---|---|
| 6(a)(i) | Who is responsible for oversight, and how that is reflected in terms of reference |
| 6(a)(ii) | How the body determines whether appropriate skills and competencies are available or will be developed |
| 6(a)(iii) | How and how often the body is informed |
| 6(a)(iv) | Whether trade-offs were considered in overseeing strategy and major transactions |
| 6(a)(v) | How the body oversees target-setting and progress, including links to remuneration |
| 6(b) | Management’s role, delegation to a position or committee, and supporting controls |
Pillar 2
Strategy pillar transformation
TCFD recommended scenario analysis without prescriptive methodology.
Its 2021 implementing guidance asks organisations to describe the resilience of their strategy “taking into consideration different climate-related scenarios, including a 2°C or lower scenario”.
UK SRS S2 paragraph 22 requires an entity to disclose which scenarios it used, its key assumptions and time horizons, using an approach “commensurate with the entity’s circumstances”.
- It requires disclosure of whether a scenario aligned with the latest international climate agreement was used — not a mandate that one must be.
- Quantification is expected where exposure and capability warrant it, and is never mandatory; qualitative scenario narratives alone can be a sufficient basis (¶B15).
- No fixed annual refresh of the underlying scenario work is required, though the resilience assessment itself is updated each period.
Scenario analysis moves from encouraged practice to a required exercise with specific disclosure parameters — though not necessarily a quantitative one.
See climate scenario analysis under UK SRS and transition plans under UK SRS.
TCFD
Recommendation B: climate-related risks and opportunities in strategy and financial planning, with limited prescription on scenario analysis or quantitative disclosure.
UK SRS S2
| Paragraph | Disclosure |
|---|---|
| 10–12 | Risks and opportunities that could reasonably be expected to affect prospects |
| 13 | Effects on business model and value chain |
| 14 | Effects on strategy and decision-making, including any transition plan |
| 15–21 | Effects on financial position, performance and cash flows |
| 22 | Climate resilience, assessed using scenario analysis |
Pillar 3
Risk management pillar expansion
TCFD’s risk management recommendation asked for a general description of how climate risks are identified, assessed and managed.
UK SRS S2 paragraphs 24–26 prescribe process disclosures, including the inputs used, the role of scenario analysis, integration into overall risk management and changes from the prior period.
The shift reflects a move toward comparable, auditable risk management frameworks.
TCFD
Recommendation C: identifying, assessing and managing climate risks, without detailed methodology requirements or integration standards.
UK SRS S2
| Paragraph | Disclosure |
|---|---|
| 25(a) | Processes and policies to identify, assess, prioritise and monitor climate-related risks, including inputs and parameters |
| 25(a)(ii), 25(b) | Whether and how scenario analysis informs identification of risks and opportunities |
| 25(c) | How far those processes are integrated into overall risk management |
| 25(a)(vi) | Whether and how the processes have changed since the previous period |
Pillar 4
Metrics and targets pillar quantification
TCFD encouraged climate-related metrics and targets with guidance rather than requirements; from 2021 it asked for Scope 1 and 2 emissions independent of a materiality assessment.
UK SRS S2 paragraphs 27–37 set required disclosures in four groups.
Greenhouse gas emissions
- Absolute gross Scope 1, 2 and 3, measured under the GHG Protocol Corporate Standard unless a jurisdictional authority or exchange requires otherwise
- Scope 3: under the FCA’s final rules, comply-or-explain with a one-year relief from disclosure
- Measurement approach, inputs and assumptions, and any changes to them
- Location-based Scope 2, and the Scope 3 categories included
Cross-industry metrics
- Amount and percentage of assets or activities vulnerable to transition risks and to physical risks
- Amount and percentage aligned with climate-related opportunities
- Capital deployment towards climate-related risks and opportunities
- Internal carbon prices and climate-linked executive remuneration
Industry-based metrics
- Metrics associated with the entity’s business models, activities or industry
- The UK text says the entity may refer to the ISSB’s Industry-based Guidance (built on SASB Standards); IFRS S2 says shall
Targets
- Each climate-related target, its metric, scope, period, base year, milestones, and whether absolute or intensity-based
- Performance against each target, and any planned use of carbon credits
Side by side
TCFD vs UK SRS S2: the differences at a glance
| Aspect | TCFD | UK SRS S2 |
|---|---|---|
| Legal status | Voluntary recommendations; comply-or-explain under UKLR 6.6.6R(8) | Comply-or-explain under the FCA’s final rules (PS26/19), from 2027; CP26/5 had proposed mandatory |
| Disclosure approach | Principles-based flexibility | Standards-based prescription |
| Scenario analysis | Recommended, including a 2°C or lower scenario | Required (¶22); approach commensurate with circumstances; quantification not mandatory |
| Scope 3 emissions | "If appropriate" | Comply-or-explain, with a one-year relief (PS26/19) |
| Quantitative disclosure | Encouraged | Cross-industry metric categories required (¶29) |
| Assurance | Not specified | Not required; where obtained, name the provider, the disclosures assured and the standards used (PS26/19) |
| Industry guidance | Supplemental guidance for financial and selected non-financial sectors | Industry-based metrics required (¶32); SASB-based guidance optional in the UK text |
Value chain
Scope 3 emissions: from guidance to requirements
TCFD’s 2021 Annex asked organisations to disclose Scope 1 and 2 emissions independent of a materiality assessment and, “if appropriate”, Scope 3.
UK SRS S2 paragraph 29(a)(i)(3) requires absolute gross Scope 3 emissions, and paragraph B32 requires the entity to consider all 15 GHG Protocol categories and disclose which are included in its measure.
Under the FCA’s final rules Scope 3 sits on comply-or-explain, like every other UK SRS disclosure; it never becomes mandatory.
A company may use one year’s non-disclosure of Scope 3 and two years’ non-disclosure of UK SRS S1 non-climate matters (PS26/19 ¶3.14).
FCA CP26/5 chapter 8 had proposed the same two periods, plus a one-year relief permitting continued use of a GHG measurement method the entity was already applying.
The final UK SRS S1 and S2 appendices (¶E3, ¶C4) carry no time limit of their own; the FCA’s rules set the periods.
A company using a relief states that it is doing so, and no further explanation is required during the relief period (PS26/19 ¶3.20).
This is the most significant expansion from TCFD to UK SRS: value chain emissions move from an “if appropriate” recommendation to a structured disclosure with three required limbs of explanation where a company does not comply.
See Scope 3 under UK SRS.
A one-year relief from disclosure, on a statement that the company is using it (PS26/19 ¶¶3.14, 3.20).
Then comply-or-explain, like every other UK SRS disclosure.
UK SRS S2 ¶29(a)(vi)(2) and ¶¶B58–B63A set detailed financed emissions requirements for asset management, commercial banking and insurance — absent from TCFD guidance.
¶B59A adds a UK-only duty to explain where financed emissions cannot be estimated for the same period as the financial statements.
Assurance
Assurance and verification differences
TCFD made no specific recommendations about assurance or external verification, leaving it as a company choice guided by existing audit and assurance frameworks.
UK SRS does not come with mandatory assurance either.
The FCA’s final rules do not require assurance, as FCA CP26/5 paragraph 7.5 had also proposed.
The FRC’s ISSA (UK) 5000, issued 12 November 2025 and effective for engagements on sustainability information reported for periods beginning on or after 15 December 2026, governs how an engagement is performed if one is commissioned.
It is for voluntary use and creates no obligation to obtain assurance.
See UK SRS assurance.
Under the FCA’s final rules, where assurance is obtained the company names the provider, which disclosures were assured and which assurance standards were used (PS26/19 ¶2.45).
CP26/5 had proposed a similar statement and did not ask for reasons for declining assurance.
Timeline
The TCFD to UK SRS transition: timeline and gap analysis
Companies currently reporting under TCFD face a compressed timeline.
- 25 Feb 2026Final UK SRS published
- 5 Jun 2026FCA CP26/17
Proposes removing product-level TCFD reporting for asset managers, life insurers and FCA-regulated pension providers. Closed 13 July 2026.
- 30 Sep 2026FCA final rules on CP26/5 — PS26/19
Comply or explain across the UK SRS for listed companies in scope.
- 1 Jan 2027UK SRS comply or explain begins
For accounting periods beginning on or after this date; first reports in 2028.
- Year 1Scope 3 relief
One year’s non-disclosure, stated as used.
The FCA’s final rules phase parts of the regime — Scope 3 and UK SRS S1 non-climate matters both carry transitional reliefs.
Everything else in UK SRS S2 applies, on a comply-or-explain basis, from accounting periods beginning 1 January 2027.
Where the gap analysis should look
Data infrastructure
Scope 3 needs value chain data systems beyond typical TCFD implementation.
Scenario analysis
An approach commensurate with exposure and capability — for high-exposure entities with the resources, quantitative modelling (¶B17).
Governance processes
Specific disclosure requirements may need board education and committee changes.
Internal controls
Standards-based reporting needs more rigorous data validation and review.
The wider regime
What is happening to the rest of the UK’s TCFD regime
The FCA’s TCFD-aligned Listing Rule disclosures are the part CP26/5 proposed to replace, and they are not the whole of the UK’s TCFD architecture.
FCA CP26/17 (Quarterly Consultation No 52), published 5 June 2026, separately proposes removing product-level TCFD reporting for asset managers, life insurers and FCA-regulated pension providers, replacing it with targeted retail and institutional disclosure rules.
The consultation closed on 13 July 2026 and final rules are expected in autumn 2026.
Firms in financial services should treat the two consultations as separate workstreams.
Not changing under CP26/17.
That proposal is about product-level reporting only.
Support
Professional guidance and support
Legal framework. Companies Act 2006 section 414CB already imposes mandatory climate-related financial disclosure on large companies.
The Government has confirmed UK SRS S2 as a national reporting framework for the purposes of section 414CB(6), so a company using it need not duplicate the section 414CB(2A) disclosures.
UK SRS S2 itself is not mandatory for anyone — the FCA’s rules are comply or explain — so this widens the routes to compliance rather than creating a new mandatory regime.
Technical implementation. Professional services firms have developed TCFD-to-UK SRS gap analysis methods on the basis that TCFD experience is a foundation, not full preparation.
Board readiness. Director education is shifting from TCFD’s governance oversight recommendations to UK SRS’s specific board capability and decision-making disclosures.
The FCA’s final rules ask listed companies to report against a detailed standard, or explain why not, which calls for systematic preparation rather than incremental enhancement of existing TCFD processes.
For implementation guidance, see the UK SRS compliance guide, the clause-by-clause reference for UK SRS S2, and UK SRS four pillars.
Sources
Primary sources
Every figure, date and status on this page traces to the instrument’s owner. Secondary commentary is never the source for a number.
- Task Force on Climate-related Financial DisclosuresFinal Report: Recommendations of the TCFD (June 2017, PDF)
The four-pillar structure UK SRS S2 retains.
- Task Force on Climate-related Financial DisclosuresImplementing the Recommendations — October 2021 Annex (PDF)
Scope 1 and 2 independent of materiality, Scope 3 "if appropriate", and the 2°C or lower scenario.
- Financial Stability BoardFSB annual progress report on climate-related disclosures (12 October 2023)
The TCFD’s work complete; the ISSB to monitor progress.
- Department for Business and TradeUK SRS S2 Climate-related Disclosures — final standard (PDF)
Published 25 February 2026. Governance ¶¶5–7, strategy ¶¶8–23, risk management ¶¶24–26, metrics and targets ¶¶27–37.
- IFRS FoundationIFRS S2 Climate-related Disclosures
The international standard underlying UK SRS S2.
- IFRS FoundationISSB and TCFD
The Foundation’s account: applying IFRS S1 and S2 meets the TCFD recommendations.
- Financial Conduct AuthorityPS26/19: Aligning listed issuers' sustainability disclosures with international standards
First published 30 September 2026. The final rules: listed companies in scope report against UK SRS on a comply-or-explain basis for accounting periods starting on or after 1 January 2027 (¶1.7, ¶3.12); reliefs (¶3.14); assurance (¶2.45).
- Financial Conduct AuthorityCP26/5: Sustainability disclosures
The consultation PS26/19 finalises: it proposed replacing the TCFD-aligned Listing Rule with mandatory UK SRS S2 from 1 January 2027.
- Financial Conduct AuthorityFCA Handbook — UKLR 6.6.6R(8)
The current TCFD-aligned Listing Rule statement that CP26/5 proposed to replace.
- Financial Conduct AuthorityCP26/17: Quarterly Consultation Paper No 52
Published 5 June 2026, closed 13 July 2026. Proposes removing product-level TCFD reporting.
- legislation.gov.ukCompanies Act 2006, section 414CB
The climate-related financial disclosure duty for large companies, and the section 414CB(6) national-framework route.
- legislation.gov.ukThe Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022 (SI 2022/31)
The instrument that inserted the duty into the Companies Act 2006.
- GHG ProtocolCorporate Value Chain (Scope 3) Standard
The 15 categories UK SRS S2 ¶B32 requires an entity to consider.
- Financial Reporting CouncilISSA (UK) 5000 issued (12 November 2025)
The FRC sustainability assurance standard, issued for voluntary use.
Continue reading
Read next
UK SRS S2 — climate-related disclosures
The climate disclosure requirements listed companies report against, or explain, from 2027.
UK SRS four pillars
How the TCFD four-pillar structure evolves under UK SRS S2.
Scope 3 under UK SRS
Value chain emissions requirements beyond TCFD’s “if appropriate”.
UK SRS compliance guide
The programme for moving from TCFD reporting to UK SRS.