Implementation · Compliance Programme

UK SRS compliance guide

How to comply with UK SRS: the governance, systems, processes and documentation a UK SRS compliance programme needs for the FCA’s comply-or-explain regime from January 2027.

That regime is set by the FCA’s final rules (PS26/19, 30 September 2026), which finalise FCA consultation paper CP26/5.

See the programme →Start with a gap analysis

Scope

Who UK SRS compliance binds

UK SRS compliance applies to listed companies in five UK Listing Rules categories under the FCA’s final rules, on a comply-or-explain basis.

The Policy Statement gives no total count; CP26/5, the consultation, estimated that around 600 listed companies would be affected.

Category	Who	Obligation under the final rules
UKLR 6	Commercial companies — the largest category, including most FTSE companies	UK SRS, comply or explain
UKLR 16	Non-equity shares	UK SRS, comply or explain
UKLR 22	Transition category companies	UK SRS, comply or explain
UKLR 14	Secondary listings of overseas companies	UK SRS, comply or explain (CP26/5 ch. 9 had proposed a statement only)
UKLR 15	Depositary receipts	UK SRS, comply or explain (CP26/5 ch. 9 had proposed a statement only)
UKLR 11 and 12	Closed-ended investment funds; open-ended investment companies	Out of scope

The final rules create the obligation — what the FCA has decided, and what it could enforce sets out the listing-rule mechanics and the enforcement powers behind them.

UKLR 14 and 15 issuers report against UK SRS on the same basis; CP26/5 had proposed only a statement, on the view that reporting obligations belong in the primary listing jurisdiction, and the final rules did not adopt it.

For the detail of that distinction, see overseas companies and UK SRS.

Private companies are not in scope, and no requirement has been proposed for them.

The Modernising corporate reporting consultation, published on 7 September 2026 and closing on 30 November 2026, says only that the government “will consider how UK SRS should be reflected in the Companies Act 2006” — it proposes no threshold and no commencement date for private companies.

Listing categories in scope of the FCA's final rules

FCA PS26/19 ¶3.6 · PS26/19

~600

Listed companies CP26/5 estimated would be affected — the consultation’s estimate

FCA CP26/5 Annex 2 ¶43

FCA final rules published

The FCA published its final rules, PS26/19, on 30 September 2026.

They changed the basis the consultation proposed: comply or explain across the UK SRS, S2 included, and UKLR 14 and 15 brought into reporting.

How the consultation became the final rules is recorded on the CP26/5 consultation tracker.

Compliance basis

The compliance basis: comply or explain, throughout

The final rules apply one basis to everything — comply or explain — with reliefs for Scope 3 and for S1 non-climate matters. CP26/5 had proposed a mandatory S2 core; the final rules do not have one.

Sources: FCA PS26/19 (30 September 2026), the final rules; FCA CP26/5 (30 January 2026), the consultation.
Element	Final rules (PS26/19)	What CP26/5 had proposed
UK SRS S2 — all four pillars, Scope 1 and 2	Comply or explain, accounting periods beginning on or after 1 January 2027 (¶1.7, ¶3.12)	Mandatory (CP26/5 ¶3.8)
Scope 3 emissions	Comply or explain, with one year’s relief from disclosure (¶3.14)	Outside the mandatory core; one-year relief, then comply-or-explain (¶¶3.9, 4.8)
UK SRS S1 — general requirements	Comply or explain, with two years’ relief for non-climate matters (¶3.14)	Comply-or-explain with a two-year relief (¶3.9)
Transition plan	Disclose whether there is a climate-related transition plan and, if so, where it can be found; no duty to have one (¶2.37)	Location-or-explain statement (¶6.9, ¶1.7)
Assurance	Not required; where obtained, name the provider, the disclosures assured and the standards used (¶2.45)	Statement of whether assurance was obtained (¶¶7.6–7.8)

Reliefs

Using a relief

A company using a relief must state that it is doing so.

No further explanation is required during the relief period (PS26/19 ¶3.20).

Climate-first

What you can assert

A company using the climate-first relief cannot assert compliance with UK SRS S1 and must disclose use of the relief.

It may still assert compliance with UK SRS S2 (UK SRS S1 ¶73A).

Transition plans

A matter for Government

The FCA said mandating transition plans “is a matter for Government” (CP26/5 ¶1.7); the final rules ask only whether there is one, and where (PS26/19 ¶2.37).

The relief periods are the FCA’s, not the Standards’

The final Standards of 25 February 2026 removed the time limits from the Scope 3 relief (UK SRS S2 ¶C4) and the climate-first relief (UK SRS S1 ¶E3), leaving the periods to be set by legislation or FCA rules.

The FCA’s final rules now fix them: one year for Scope 3 and two years for S1 non-climate matters (PS26/19 ¶3.14).

CP26/5 ¶8.11 had proposed that early adopters of the FCA’s rules could not use the reliefs at all; check the final rules before applying early.

The programme

How to comply with UK SRS: preparing your programme

The FCA’s comply-or-explain rules apply from accounting periods beginning in January 2027, so preparation now buys development time and stronger stakeholder positioning.

A practical first step is a structured UK SRS gap analysis against your existing TCFD-aligned disclosures.

Phase 1

Foundation

Gap analysis against UK SRS S1 and S2
Board governance with a clear sustainability oversight mandate
Data infrastructure and internal controls designed
Legal, technical and assurance advisers engaged
Project framework with timelines and accountability

Phase 2

Implementation

Data collection built, with Scope 3 emphasised
Governance integrated into risk management and reporting
Scenario analysis suited to business model and sector
Management information for board and committee oversight
Voluntary assurance providers engaged and scope agreed

Phase 3

Testing and refinement

Trial report against UK SRS to surface gaps
Internal controls over sustainability data tested
Board and management capability reviewed
Assurance arrangements finalised
Policies and procedures updated from the trial

Phase 4 · ongoing

Go-live and improvement

First reports delivered in the annual report cycle
FCA guidance and technical-note developments monitored
Disclosure effectiveness and feedback reviewed annually
Benchmarked against peers and market practice
Planned for UK SRS S1 non-climate disclosure after the two-year relief

Lead time

Building full UK SRS capability is a multi-phase programme rather than a year-end exercise.

Scope 3 data infrastructure is usually the longest-lead element, needing extensive supplier engagement and data validation before the first period in which the comply-or-explain limb applies.

Workstream · Governance

Compliance governance: structures and oversight

Effective UK SRS compliance needs board-level governance with clear accountability.

The Standards require disclosure of how the board oversees sustainability-related (UK SRS S1 ¶¶26–27) and climate-related (UK SRS S2 ¶¶5–7) risks and opportunities.

Oversight integrated into existing governance structures
Board skills and competencies relevant to sustainability
How sustainability informs strategy, business model and value creation

Below the board, designate management roles for sustainability reporting, with clear lines of accountability, integration with existing risk management and internal controls, and regular reporting upward.

The evidence is documentary: updated terms of reference, minutes that record sustainability discussions, skills matrices, and management packs carrying sustainability metrics and risks.

The board’s side of this is covered in board oversight of sustainability reporting.

Committee structures — practical options

Option	When it fits
Expand the audit committee	The most common approach — it already oversees reporting
Dedicated sustainability committee	Significant sustainability exposures
Risk committee integration	Climate and sustainability risks are material
Nomination committee role	Board sustainability competencies and succession

Workstream · Gap analysis

Compliance gap analysis: what to assess

A gap analysis maps current sustainability reporting and governance against UK SRS — and for most listed companies it starts from TCFD.

How TCFD maps to UK SRS S2. Sources: UK SRS S2 (DBT, 25 Feb 2026); FCA PS26/19.
Disclosure area	TCFD recommendation (2017)	UK SRS S2 requirement
Emissions disclosure	Scope 1 and 2; Scope 3 if appropriate	Scope 1, 2 and 3 (¶29(a)); under the FCA's final rules Scope 3 is comply-or-explain, with a one-year relief
Scenario analysis	Where appropriate to the business	Required, commensurate with the entity's circumstances (¶22)
Cross-industry metrics	Not specified	Seven categories required (¶29(a)–(g))
Financial quantification	Encouraged where practical	Current and anticipated financial effects (¶¶15–21)
Industry-based metrics	Not specified	'May refer to and consider' the ISSB industry-based guidance (¶32, UK amendment)

Baseline

Current reporting

TCFD-aligned disclosures — most listed companies already have some
Section 414CB climate disclosures
SECR data
Voluntary reports and frameworks (GRI, SASB)

UK SRS S2

Four pillars

Governance: oversight, roles, skills, strategy integration
Strategy: business model, scenario analysis, transition planning, quantification
Risk management: process integration, identification and assessment
Metrics and targets: Scope 1/2/3, cross-industry and industry metrics, targets

UK SRS S1

Comply-or-explain readiness

Materiality assessment process and outcomes
Sustainability topics beyond climate
Four-pillar disclosure for non-climate topics
Connected information with the financial statements (S1 ¶¶21–24)

Systems

Process gaps

Data collection for UK SRS metrics
Internal controls over sustainability information
Management information and reporting cycles
Document retention and audit trail

Workstream · Data

Compliance data infrastructure: systems and processes

UK SRS compliance demands data that can be collected, validated and reported to the standard of financial information.

Scope 1 and 2

Energy consumption data (electricity, gas, fuel), maintained emission factor databases, facility-level aggregation, and monthly or quarterly collection cycles — integrated with SECR systems where possible.

Scope 3 (comply-or-explain)

Build it by GHG Protocol Scope 3 category:

Supplier engagement for Category 1 (purchased goods and services)
Logistics data for Categories 4 and 9 (upstream and downstream transportation)
Asset-level data for Category 2 (capital goods) and Category 13 (downstream leased assets)
Customer usage data for Category 11 (use of sold products) where applicable
Financial institutions: financed emissions under Category 15 and the PCAF methodology

Quality, controls and technology

Source documentation and audit trails, validation and reconciliation, third-party verification where material, management sign-off, and error-correction and restatement procedures.

On the technology side: integration with ERP and financial consolidation, supplier portals for value chain data, external data feeds (scenarios, emission factors), dashboards, role-based access and version control for methodology changes.

Platform providers active in this market include (illustrative, not a recommendation):

Enterprise: Workiva, Sphera, Enablon, SAP Sustainability Control Tower
Specialist emissions: Persefoni, Plan A, Greenstone, Watershed
ESG data and ratings used by financial services: Moody’s ESG Solutions, MSCI ESG Research, Sustainalytics
ERP modules: SAP S/4HANA Sustainability, Oracle Cloud Sustainability

Cross-industry climate metrics · UK SRS S2 ¶29(b)–(g)

Metric	What the data must support
Transition risk	Exposure and financial impact quantification
Physical risk	Exposure, acute and chronic
Opportunities	Identification and quantification
Capital deployment	Tracking climate-related investment
Internal carbon price	Usage and application
Remuneration	Executive pay linked to climate performance

Workstream · Reporting cycle

The annual rhythm and the audit trail

UK SRS disclosures run on the same cycle as financial reporting, inside the annual report production process.

The months below are our indicative estimate, for a calendar-year reporter.

Jan – Mar
Year-end data collection
Finalise Scope 1 and 2, complete and validate Scope 3, update scenario analysis and risk assessments, calculate cross-industry metrics, management sign-off.
Mar – May
Annual report drafting
Integrate disclosures with the Strategic Report, meet the connected-information requirement, draft the four pillars, coordinate with the financial statements and audit, prepare management representations.
Apr – Jun
Assurance (where commissioned)
Provide evidence to the voluntary assurance provider, respond to queries, review the report and management letter, update disclosures.
May – Jul
Publication and filing
Board approval, publication via RNS and the company website, filing with Companies House, investor communication, post-publication review.
Aug – Dec
Continuous improvement
Review effectiveness and feedback, update systems, monitor guidance, plan next year’s data improvements, develop board and management capability.

The disclosures sit in the annual report, so they need the same documentary standard as financial reporting.

Source

Evidence

Energy bills, fuel receipts, consumption records
Supplier questionnaires, invoices, third-party data
Board minutes on sustainability governance
Scenario analysis and modelling files

Controls

Internal control

Collection and validation policies
Data flow and system documentation
Entity and consolidated review and approval
Management representations and certifications

Assurance

Assurance file

Engagement letters and scope
Representation letters to the provider
Working papers and evidence
Reports and management responses

Regulatory

Regulatory record

Materiality assessment and updates
Comply-or-explain justifications where reliefs are used
Transition plan documentation where published
Skills assessments, gap analysis and remediation plans

Align retention with the company’s statutory accounting-records policy, with access controls, version management, backup, and an audit trail for every change or correction.

Workstream · Assurance

Compliance assurance: voluntary, and ISSA (UK) 5000

Under the FCA’s final rules (PS26/19 ¶2.45), where a company obtains assurance it names the assurance provider, which disclosures were assured and which assurance standards were used.

CP26/5 ¶¶7.6–7.7 had proposed a similar statement, including the level of assurance and where the report can be found.

ISSA (UK) 5000

ISSA (UK) 5000 is the UK version of the IAASB’s ISSA 5000, issued by the FRC on 12 November 2025 for voluntary use.

It is effective for engagements on periods beginning, or as-at dates, on or after 15 December 2026, and early application is permitted (¶15).

It is profession-agnostic — audit firms, consultancies and other providers — and covers both limited and reasonable assurance.

Neither CP26/5 nor the final rules names an assurance standard; they ask only which standards were used.

If you commission assurance

Scope: focus on material metrics and forward-looking information
Provider: balance technical expertise with cost and availability
Timing: engage early, given provider capacity constraints
Integration: coordinate with the statutory auditor on overlapping areas

Readiness means robust internal controls, complete source documentation, management sign-off, and providers engaged at the planning stage.

More at UK SRS assurance.

Assurance: not required

The FCA’s final rules do not require assurance.

Where it is obtained, the company names the provider, the disclosures assured and the standards used.

Direction of travel

The Government’s January 2026 response on an oversight regime confirmed a voluntary, opt-in register rather than a mandate.

In the consultation the FCA said it “may return to the question of mandatory assurance at a later stage” (CP26/5 ¶7.8).

Building assurance-ready processes now is prudent preparation, not a regulatory requirement.

Workstream · Risk

Compliance risk: penalties and safe harbour

UK SRS compliance carries regulatory enforcement risk, balanced by a statutory liability shield.

Enforcement and liability

FCA Listing Rules enforcement, including censure and financial penalties
Market abuse investigation powers where disclosure failures are material
Possible suspension of securities for serious non-compliance
Directors’ duties under section 172 and Strategic Report obligations under sections 414A–414D
Civil claims where misstatements cause investor loss, and criminal liability for knowingly false statements

The section 463 safe harbour

UK SRS disclosures placed in the strategic report benefit from the liability protection in section 463.

It is a liability shield, not a sanction — it creates no penalty of its own.

Managing the risk

Internal controls over data quality, regular board review, management representations and sign-off, professional advice on complex areas, voluntary assurance for added comfort, and a D&O insurance review to confirm sustainability reporting is covered.

Companies Act 2006 s463 — what the safe harbour does

Source: Companies Act 2006, section 463
Provision	Effect
s463(1)	Covers the strategic report, the directors' report, the directors' remuneration report and any separate corporate governance statement
s463(2)–(3)	A director compensates the company only where they knew a statement was untrue or misleading, were reckless, or knew an omission to be dishonest concealment
s463(4)	No liability to anyone other than the company for reliance on those reports
s463(6)	Does not affect liability for a civil penalty or a criminal offence

Parallel regimes

Compliance interaction with other regimes

UK SRS does not replace the other UK sustainability reporting duties — plan for parallel compliance.

Regime	Relationship to UK SRS	Planning approach
SECR (SI 2018/1155)	Remains mandatory for large companies: annual energy and carbon disclosure in the Directors’ Report, with different scope, metrics and location. The post-implementation review of SECR (26 May 2026) recommends retaining it with amendments; DESNZ “intends to hold” a SECR and ESOS consultation later in 2026, not launched as at 26 September 2026. The Modernising corporate reporting consultation proposes to move where SECR disclosures sit once the directors’ report is abolished, not to remove the duty.	Plan for full separate compliance with both regimes
Companies Act section 414CB	The Government confirmed UK SRS S2 is a “national reporting framework” for s414CB(6), so companies reporting under it need not duplicate their s414CB(2A) disclosures. Companies in scope of s414CB that do not report under S2 continue to make them.	UK SRS S2 discharges the duty
TCFD-aligned listing rules	CP26/5 ¶4.4 proposed replacing them with UK SRS S2 for in-scope listed companies; the FCA’s final rules put those companies on comply or explain against UK SRS from 1 January 2027. The TCFD-aligned rule stays in the Handbook until the FCA changes it.	Use current TCFD disclosures as the gap-analysis baseline
ESOS Phase 4	Under the Environment Agency’s Phase 4 guidance, the qualification date is 31 December 2026 and the compliance date 5 December 2027 — overlapping directly with UK SRS implementation.	Use ESOS energy audits to support Scope 1 and 2 baselines
Overseas regimes	EU CSRD for EU subsidiaries or operations; ISSB-aligned requirements elsewhere. US SEC climate rules were adopted in 2024 but remain stayed, with rescission proposed in May 2026.	Do not build around the SEC rules; UK SRS alignment with IFRS S1/S2 reduces the multinational burden

By sector

Industry-specific considerations

The requirements apply consistently across the listed companies in scope, but the implementation work varies by sector.

Financial services

Banks, insurers, asset managers

Financed emissions under UK SRS S2 ¶¶B58–B63A need portfolio-level data; UK-specific ¶B59A requires an explanation where they cannot be estimated for the same period as the financial statements
The PCAF data quality framework applies
The PRA’s Supervisory Statement SS5/25, which replaced SS3/19 on 3 December 2025, is the climate risk management foundation
Stress testing supports scenario analysis; asset-level exposure data supports risk quantification
See UK SRS for financial services and guidance on financed emissions

Manufacturing

Manufacturing and industrial

Direct emissions usually well established through SECR
Supply chain Scope 3 needs extensive supplier engagement
Energy intensity and decarbonisation targets central to transition planning
Asset-level climate hazard analysis for physical risk
Process emissions may need specialist measurement

Retail

Retail and consumer goods

Value chain emissions from raw materials to end-of-life
Heightened stakeholder scrutiny on brand
Customer behaviour assumptions drive use-of-sold-products Scope 3
Supply chain due diligence supports Scope 3 quality
Store energy and logistics give the Scope 1 and 2 baseline

Real estate

Real estate and construction

Building energy performance and embodied carbon central
Tenant engagement needed for complete accounting
Development pipeline resilience for physical risk
Green building certification linked to metrics
Valuation impacts from transition and physical risk

Technology

Technology and telecoms

Data centre energy and renewable sourcing dominate
Product lifecycle assessment supports Scope 3
Fast-moving business models need forward-looking scenarios
Complex electronics supply chains
Digital solution benefits may feature as opportunities

Making it work

Common challenges and programme maturity

No UK SRS programme has reported yet, but these challenges recur in TCFD and ISSB-aligned reporting programmes.

Challenge 01

Scope 3 data availability and quality

Problem: Supplier resistance and inconsistent data.

Response: A structured supplier programme with graduated requirements, built into procurement contracts.

Challenge 02

Scenario analysis sophistication

Problem: Moving from qualitative TCFD narrative to quantified financial impact.

Response: Start at sector level before asset-specific; bring in specialists for complex transition modelling.

Challenge 03

Integration with financial reporting

Problem: Sustainability and finance working in isolation.

Response: Joint working groups under CFO leadership, with sustainability input.

Challenge 04

Board and senior management capability

Problem: Limited technical understanding of metrics and risk.

Response: Structured education, external advisory support, and a non-executive with relevant expertise.

Challenge 05

Technology integration

Problem: Sustainability systems separate from core systems.

Response: API-based integration and master data management — sustainability treated as core business data.

Challenge 06

Regulatory uncertainty

Problem: Evolving guidance and varied peer practice.

Response: Monitor regulators and professional bodies; interpret conservatively, with legal review on complex areas.

Maturity level	What it looks like
1 — Basic compliance	Board awareness and basic oversight; minimum-requirement focus; limited integration with strategy and risk; reactive disclosure
2 — Integrated management	Embedded board and management accountability; integrated with risk and planning; proactive materiality and engagement; systematic data controls
3 — Strategic leadership	Sustainability integral to strategy; advanced scenario analysis and forward-looking targets; leading disclosure quality; methodology and technology innovation

Indicators worth tracking

Data quality: completeness across Scope 1, 2 and 3; share of material data third-party verified; restatement frequency and size; time to close the annual data cycle
Process efficiency: year-end to disclosure lead time; manual processes still to automate; staff time by activity; cost per verified tonne of CO2e
Stakeholders: investor engagement on disclosure; ratings and benchmark position; regulator feedback; internal confidence
Compliance risk: internal audit findings and actions closed; assurance qualifications or recommendations; board time on sustainability; programme team turnover and capability gaps

The complexity of UK SRS compliance should not be underestimated, but the phased approach and the existing TCFD baseline give a foundation for systematic preparation.

Companies that start planning now will be best positioned for the FCA’s comply-or-explain regime from January 2027.

For wider context, see the editorial UK SRS explainer and the FCA’s sustainability disclosure requirements at our sister site, and the primary UK SRS reference.

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.

Checked against 13 sources fromFinancial Conduct AuthorityDepartment for Business and Tradelegislation.gov.ukDepartment for Business, Innovation, Science and TradeDepartment for Energy Security and Net ZeroEnvironment Agency

Financial Conduct Authority
PS26/19: Aligning listed issuers' sustainability disclosures with international standards
First published 30 September 2026. The final rules: comply or explain across the UK SRS (¶1.2, ¶1.7); scope (¶¶3.6–3.7); commencement (¶3.12); reliefs (¶¶3.14, 3.20); transition plans (¶2.37); assurance (¶2.45).
Financial Conduct Authority
CP26/5: sustainability disclosures for listed issuers
The consultation PS26/19 finalises — chapters 2–9 and Annex 2, including its estimate of around 600 listed companies affected.
Department for Business and Trade
UK SRS S1 and UK SRS S2 — final standards
Published 25 February 2026.
legislation.gov.uk
Companies Act 2006, section 463
Liability for false or misleading statements in the strategic report and directors' report.
legislation.gov.uk
Companies Act 2006, section 414CB
Climate-related financial disclosures; subsection (6) on national reporting frameworks.
Department for Business and Trade
Government response to the UK SRS consultation
The UK amendments and the implementation approach.
Department for Business, Innovation, Science and Trade
Modernising corporate reporting — consultation
Published 7 September 2026, closes 30 November 2026; proposes no UK SRS threshold.
Department for Energy Security and Net Zero
2026 post-implementation review of the SECR Regulations 2018
Recommends retaining SECR with amendments; a consultation on streamlining is to follow.
Environment Agency
Comply with ESOS Phase 4
Qualification date 31 December 2026; compliance date 5 December 2027.
Financial Reporting Council
ISSA (UK) 5000 (PDF)
The UK sustainability assurance standard; paragraph 15 sets the effective date.
Department for Business and Trade
Oversight regime for assurance of sustainability disclosures — government response
A voluntary, opt-in oversight regime; interim FRC register tasked for mid-2026.
Prudential Regulation Authority
Supervisory Statement SS5/25
Replaced SS3/19 in its entirety on 3 December 2025.
GHG Protocol
Corporate Value Chain (Scope 3) Standard
The fifteen Scope 3 categories referred to in the data section.