Industry response to CP26/5: investors want a mandatory pathway
The FCA’s CP26/5 consultation closed on 20 March 2026, drawing detailed responses from the UK’s major investor bodies.
Most welcomed the shift from TCFD-aligned rules to the UK SRS.
But a clear theme emerged: investors want Scope 3 emissions and the wider UK SRS S1 standard on a defined route to mandatory reporting, not left indefinitely on comply-or-explain.
This is our reading of who said what, and what it signals for the autumn 2026 Policy Statement.
What investors actually said
CP26/5 proposed replacing the TCFD-aligned Listing Rules with rules requiring in-scope listed companies — those in UK Listing Rules categories 6, 16 and 22, around 500 companies — to report against UK SRS S2 from 1 January 2027[1].
Under the proposals, Scope 3 emissions and the wider UK SRS S1 standard would sit on a comply-or-explain basis rather than being strictly mandatory[1].
That single design choice became the centre of gravity for the investor responses.
The standards themselves were broadly welcomed; the comply-or-explain treatment of the most decision-useful data was not.
PRI: comply-or-explain creates UK-specific data gaps
The Principles for Responsible Investment published its response on 26 February 2026, the day after the final standards were issued[2].
Its central concern was that making Scope 3 greenhouse gas emissions and non-climate disclosures voluntary on a comply-or-explain basis reduces the scope of mandatory disclosure to exclude information investors treat as material[2].
The PRI argued this risks creating data gaps specific to UK portfolio companies, undermining comparability and pushing costs onto investors, who must instead obtain the information through third-party estimates or direct requests to companies[2].
It also framed the approach as a divergence from the international mainstream, noting it departs from most of the nearly 40 jurisdictions adopting ISSB Standards, and recommended a phased mandatory approach in place of comply-or-explain[2].
IIGCC: a formal response from €60tn of assets
The Institutional Investors Group on Climate Change submitted a formal response to the FCA in March 2026[3].
The IIGCC is one of the most significant investor voices in the consultation: it represents over 400 members managing more than €60 trillion in assets[3].
Its submission provided investor feedback on the CP26/5 proposals for listed companies’ sustainability disclosures, reinforcing the broader investor message about the value of consistent, comparable climate data[3].
For the policy detail behind that data — what the four pillars require and where Scope 3 sits — see our UK SRS requirements analysis.
UKSIF: welcome the standards, define the route to mandatory
The UK Sustainable Investment and Finance Association submitted its response on 20 March 2026, the day the consultation closed[4].
UKSIF broadly supported the proposed transition from TCFD-aligned disclosures to requirements referencing UK SRS S1 and S2, calling it an important milestone for the UK regime[4].
But it recommended that the FCA set out a clear and gradual pathway towards mandatory reporting of Scope 3 emissions for in-scope listed companies, with specific reporting timeframes rather than an open-ended comply-or-explain basis[4].
It made the same recommendation for UK SRS S1, supporting confirmation of a defined route to mandatory non-climate reporting[4].
| Respondent | Position on the UK SRS shift | Core ask on comply-or-explain |
|---|---|---|
| PRI | Supports alignment with ISSB Standards | Replace comply-or-explain with a phased mandatory approach for Scope 3 and S1 |
| IIGCC | Formal investor feedback to the FCA | Reinforces the case for consistent, comparable climate data across listed companies |
| UKSIF | Broadly welcomes UK SRS S1 and S2 | Set a clear, gradual pathway to mandatory Scope 3 and S1 with defined timeframes |
The themes that emerged
One. The principle of moving to UK SRS is not contested. Each of the major investor responses welcomed the transition away from the now-disbanded TCFD framework towards the ISSB-derived standards[2].
Two. Comply-or-explain is the fault line. The recurring concern is that the most material data — Scope 3 and the wider S1 disclosures — would be optional in practice, weakening the dataset investors rely on[2].
Three. Investors want a timetable, not a permanent exemption. UKSIF’s call for a clear and gradual pathway with specific timeframes captures the constructive version of the critique: not "mandatory now", but "a defined route to mandatory"[4].
Four. The international comparison carries weight. The PRI’s point that comply-or-explain departs from most ISSB-adopting jurisdictions reframes the debate as one about UK competitiveness and comparability, not just compliance cost[2].
What this signals for the Policy Statement
The FCA is now reviewing responses and aims to publish a Policy Statement in autumn 2026, with rules proposed to take effect for accounting periods beginning on or after 1 January 2027[1].
Three broad outcomes are possible: the FCA holds the comply-or-explain line as consulted, tightens it by setting a defined sunset date for Scope 3 and S1 reliefs, or adjusts the overall timeline.
The investor responses push hardest on the middle option — keeping the phased structure but attaching firm dates to it, which is close to what UKSIF asked for explicitly[4].
For the underlying dates and reliefs the FCA proposed, see our UK SRS deadline tracker, and for the consultation mechanics themselves the consultation tracker.
Industry response to CP26/5: frequently asked questions
How did investors respond to FCA CP26/5?
Investor bodies broadly welcomed the move to align UK Listing Rule disclosures with the UK SRS, but several pushed back on the decision to keep Scope 3 emissions and the wider UK SRS S1 standard on a comply-or-explain footing rather than mandatory. The Principles for Responsible Investment (PRI), the Institutional Investors Group on Climate Change (IIGCC) and the UK Sustainable Investment and Finance Association (UKSIF) each argued for a clearer pathway to mandatory reporting. The CP26/5 consultation closed on 20 March 2026 and the FCA is expected to publish a Policy Statement in autumn 2026.
What was the PRI’s main criticism?
The PRI’s response, published on 26 February 2026, argued that making Scope 3 emissions and non-climate disclosures voluntary on a comply-or-explain basis risks creating data gaps specific to UK portfolio companies, undermining comparability and increasing costs for investors who must otherwise rely on third-party estimates. The PRI noted that this approach departs from most of the nearly 40 jurisdictions adopting ISSB Standards, and recommended a phased mandatory approach instead of comply-or-explain.
Who is the IIGCC and what did it say?
The IIGCC (Institutional Investors Group on Climate Change) is an investor membership body representing over 400 members managing more than €60 trillion in assets. It submitted a formal response to the FCA in March 2026 providing investor feedback on the CP26/5 proposals for listed companies’ sustainability disclosures.
What did UKSIF recommend?
UKSIF broadly welcomed the shift from TCFD-aligned rules to UK SRS S1 and S2, but recommended that the FCA set out a clear and gradual pathway towards mandatory reporting of Scope 3 emissions for in-scope listed companies, with specific reporting timeframes. It made the same recommendation for UK SRS S1, supporting a defined route to mandatory non-climate reporting rather than open-ended comply-or-explain.
What does the response mean for the autumn 2026 Policy Statement?
The dominant investor theme — a clearer, time-bound pathway from comply-or-explain to mandatory Scope 3 and S1 reporting — is now in front of the FCA as it reviews responses. The FCA can adopt its proposals as drafted, modify the comply-or-explain basis in light of feedback, or adjust the timeline. The Policy Statement, expected in autumn 2026, will show how far the regulator moves towards the investor position.
- CP26/5: Aligning listed issuers’ sustainability disclosures with international standards — Financial Conduct Authority · Published 30 Jan 2026; closed 20 Mar 2026; Policy Statement expected autumn 2026
- PRI responds to final versions of UK Sustainability Reporting Standards — Principles for Responsible Investment · Response published 26 Feb 2026; concerns on Scope 3 / S1 comply-or-explain
- IIGCC response to FCA Consultation on UK SRS implementation — Institutional Investors Group on Climate Change · Submitted to the FCA in March 2026
- UKSIF response: FCA CP26/5 — Aligning listed issuers’ sustainability disclosures with international standards — UK Sustainable Investment and Finance Association · Submitted 20 March 2026; recommends a clear, gradual pathway to mandatory Scope 3 and S1
- UK Sustainability Reporting Standards (guidance) — GOV.UK / Department for Business and Trade · UK SRS S1 & S2 published 25 February 2026 for voluntary use