UK SRS · Comply or explain

UK SRS comply or explain: what a listed company builds, and what it may explain

UK SRS comply or explain is now the rule for listed companies: the FCA’s final rules in PS26/19, published on 30 September 2026, “adopt a comply or explain approach across the UK SRS”.

They apply to accounting periods beginning on or after 1 January 2027, with first reporting in 2028.

This page sets out what that makes a company produce, what it may explain instead, and how an explanation is built.

How to build an explanation →Read the FAQ

Checked against 13 sources fromFinancial Conduct AuthorityFCA HandbookDepartment for Business and TradeGHG ProtocolFinancial Reporting CouncilSee the sources

Final rules

What the FCA decided, and what it changed from CP26/5

The consultation, CP26/5, proposed that companies in scope move to mandatory reporting against UK SRS S2, with only Scope 3 and UK SRS S1 on a comply-or-explain basis.

The final rules drop the mandatory limb: PS26/19 requires “a comply or explain approach across all categories of disclosures” (¶1.7).

The FCA gives its reason in chapter 2: full UK SRS disclosure is “not yet feasible for certain smaller issuers”, and a mandatory approach “may be disproportionately burdensome for small companies”.

It also rejected a size threshold, on the ground that climate exposure depends on a company’s business model and industry, not its size.

The second change reaches overseas issuers: companies with a secondary listing or depositary receipts now report against UK SRS on a comply-or-explain basis too (¶1.7).

Comply or explain is not new to listed companies, because the existing TCFD-aligned rules “operate on a comply or explain basis” (¶1.5), and the final rules replace them (¶1.10).

How the old rule and the new one line up is covered in TCFD vs UK SRS, and the full account of the Policy Statement is on UK SRS and the FCA.

Sources: CP26/5 · PS26/19 ¶¶1.7, 1.11, 2.37, 2.45, 3.12 and the responses to Questions 8, 10 and 13–15
Element	CP26/5 proposed	PS26/19 final
UK SRS S2 climate, excluding Scope 3	Mandatory	Comply or explain
Scope 3 emissions	Comply or explain, after a 1-year relief	Unchanged
UK SRS S1 beyond climate	Comply or explain, after a 2-year relief	Unchanged
UKLR 14 and UKLR 15	A statement signposting home-jurisdiction standards	Report against UK SRS, comply or explain
First periods	Beginning on or after 1 Jan 2027	Unchanged
Early adopters	No transitional reliefs	May use the reliefs
Transition plans	Whether one is published and where, or why not	Unchanged
Assurance	Whether obtained; if so, provider, scope, level, standards	Unchanged

Comply

What “comply” requires you to produce

To comply is to include disclosures prepared in accordance with UK SRS S1 and UK SRS S2, which the Department for Business and Trade published on 25 February 2026, in the annual financial report.

UK SRS S1 ¶¶3, 18

The materiality test

Disclose risks and opportunities that could reasonably be expected to affect cash flows, access to finance or cost of capital, judged by the decisions of primary users of general purpose financial reports.

UK SRS S1 ¶25

Four pillars

Governance, strategy, risk management, and metrics and targets, for every material sustainability topic, with UK SRS S2 applying them to climate.

UK SRS S2 ¶29

Measured emissions

Gross Scope 1, 2 and 3 greenhouse gas emissions, measured under the GHG Protocol standards the Standard names.

UK SRS S1 ¶20

Same reporting entity

The disclosures cover the same reporting entity as the related financial statements.

UK SRS S1 ¶64

Same time, same period

The disclosures are reported at the same time as the financial statements and cover the same period.

UKLR 6.6.6R(8)(c)

In the annual report

Disclosures and explanations sit in the annual financial report, with cross-referencing where UK SRS S1 ¶¶B45–B47 permit it, and the company says where they are.

The standards themselves are at UK SRS S1 and UK SRS S2; the full disclosure set is laid out on UK SRS requirements.

Even a company that explains against parts of UK SRS S1 applies the parts of it that support climate reporting: the conceptual foundations, the general requirements and the compliance-statement paragraphs, listed in the guidance at UKLR 6.6.6AG.

Emissions are measured under the GHG Protocol Corporate Standard, and the Scope 3 data work is covered on Scope 3 reporting under UK SRS.

Materiality under UK SRS is single, financial materiality, and how that sits beside the EU’s double materiality is on UK SRS materiality.

Explain

What an explanation must contain

An explanation is not a gap in the report; the FCA treats it as information in its own right.

In chapter 2 of PS26/19 it says: “Where disclosures cannot be prepared in line with UK SRS, an explanation provides an important and valuable way to help investors understand the issuer’s position and any next steps.”

The content of an explanation is fixed by the made rule, reproduced beside this text, not by the consultation.

The UK SRS S2 limb asks for a summary of requirements not met, not a line for every paragraph.

The UK SRS S1 limb works at the level of the risk or opportunity, which is how CP26/5 framed it too.

The old TCFD-aligned rule asked for the timeframe within which a company expected to disclose; the UK SRS S2 rule asks only for the steps.

What the FCA expects: draft Technical Note 803.1

The level of detail is the subject of draft Technical Note 803.1, which is guidance out for consultation until 28 October 2026, not a rule.

It says an explanation “can be a short, proportionate explanation”, but “should not omit material information”.

It says the rules “do not require an explanation for each requirement of the UK SRS that has not been met”, and that an explanation could indicate the headings or paragraphs not disclosed.

It names two features it expects to see: “clear, concise and cogent”, and “issuer-specific” rather than generic.

It does not require a timeframe, but says that where one is known or estimated, it would be helpful to give it.

The principal-risk check

PS26/19 ties explaining to an obligation listed companies already carry: where climate risk is among an issuer’s principal risks and uncertainties, it should consider how that is reflected in its reporting when it chooses to explain.

The underlying rule is DTR 4.1.8R, which requires the management report to contain “a description of the principal risks and uncertainties facing the issuer”.

An explanation that treats a climate disclosure as immaterial sits awkwardly beside a principal-risks section that names climate, and a reviewer will read the two together.

UK SRS S2 · UKLR 6.6.6R(7A)

(i)
What is not met
A summary of the UK SRS S2 disclosure requirements that have not been met.
(ii)
Why not
The reasons for not making those disclosures.
(iii)
What happens next
Any steps the company is taking or plans to take to make those disclosures in future.

UK SRS S1 · UKLR 6.6.6R(7B)

(i)
Which risks or opportunities
The sustainability-related risks or opportunities of the kind in UK SRS S1 ¶3 that are not disclosed.
(ii)
Why not
The reasons for not making those disclosures.
(c)
None identified
If the company has identified no such risks or opportunities, a statement of that fact.

Source: UKLR 6.6.6R as made by PS26/19, Appendix 1. The same limbs sit in UKLR 14.3.24R, 16.3.23R and 22.2.24R.

Illustration

What an explanation looks like, in the FCA’s own draft

The FCA’s draft gives four illustrative examples, and the one beside this text is the most useful for a first-year reporter.

It names the paragraphs of UK SRS S2 that are not met, which answers the first limb.

It gives a reason specific to the company, which answers the second.

It says what the company is doing about it, and offers a period, which answers the third and the guidance’s request for a timeframe where one is known.

The same draft gives an example of a compliance statement where the Scope 3 relief is used: the company says it has met all the requirements of UK SRS S2, and that it has used the relief in UK SRS S2 ¶C4 and UKLR TP 16.4R(2).

A third example shows a small apparel company explaining that it has disclosed on some UK SRS S1 risks and not yet on others it has identified.

The fourth shows an overseas company relying on its home reporting and explaining the gaps, such as Scope 3, that its home rules do not yet require.

Draft TN 803.1, Annex 2, Example 2

“Our report includes climate-related financial disclosures prepared in accordance with UK SRS S2 requirements, except in relation to Scope 3 emissions (paragraph 29(a)(vi)) and targets (paragraphs 33 – 37). We have not yet been able to obtain sufficient Scope 3 data to make the disclosures required under the standards, or to understand the indirect climate impacts of our business. We are working with our suppliers to obtain Scope 3 information in time for the next reporting period. However, we are unlikely to be able to analyse the data and establish appropriate quantitative targets until the reporting period beginning 1 January 2029.”

Source: FCA, draft Technical Note 803.1 (September 2026), for consultation. Illustrative and non-exhaustive.

Reliefs and explanations

What you may explain, and for how long

A relief and an explanation are different things, and the rules treat them differently.

A company using a relief states that it is doing so, and “no further explanation on the matters provided for in the reliefs is required during the relief period” (¶3.20).

Source: FCA PS26/19 ¶¶3.18–3.24 and UKLR TP 16.3R–16.5R. The relief periods run from initial application, not from each company’s choice.
Accounting period beginning	UK SRS S2 climate	Scope 3	UK SRS S1 beyond climate
Before 1 Jan 2027	TCFD-aligned rules, or early adoption	TCFD-aligned rules, or early adoption	TCFD-aligned rules, or early adoption
On or after 1 Jan 2027, before 1 Jan 2028	Comply or explain	Relief: state its use	Relief: state its use
On or after 1 Jan 2028, before 1 Jan 2029	Comply or explain	Comply or explain	Relief: state its use
On or after 1 Jan 2029	Comply or explain	Comply or explain	Comply or explain

Scope 3

In the first period a company may omit Scope 3 under the relief, and the statement it makes names both UKLR TP 16.4R(2) and UK SRS S2 ¶C4.

From periods beginning on or after 1 January 2028 “the 1-year Scope 3 relief will have expired, and companies must therefore address the comply or explain requirements” (¶3.23).

PS26/19 sets no date on which the option to explain Scope 3 ends; the FCA says it will keep its requirements under review.

Companies already disclosing Scope 3 under the TCFD-aligned rules “may wish to continue to do so when the UK SRS S2 Scope 3 relief is available”, and the rules do not prevent it (¶3.22).

UK SRS S1 beyond climate

The two-year “climate-first” relief covers periods beginning before 1 January 2029, after which non-climate disclosures are complied with or explained (¶3.24).

Using the relief has a price set in the standard itself: UK SRS S1 ¶73A says a company using the climate-first provision is not permitted to assert compliance with UK SRS S1.

The compliance statement

UK SRS S1 ¶72 reserves “an explicit and unreserved statement of compliance” for disclosures that comply with all the requirements.

Draft TN 803.1 says there is no separate compliance statement under the listing rules, and that an issuer cannot make the UK SRS statement for a standard it explains against.

So the wording of the compliance statement belongs in the same workstream as the explanations, not at the end of it.

Scope and dates

Which listing categories, from which period

The rules apply to issuers listed in UKLR 6, 14, 15, 16 and 22 (¶3.6).

Closed-ended investment funds, open-ended investment companies, shell companies, and issuers of debt, securitised derivatives and warrants are outside them (¶3.7).

PS26/19 gives no total count of companies affected; CP26/5 estimated that around 600 listed companies would be affected, and that was the consultation’s estimate, not a figure in the final rules.

The category titles are the FCA’s own, in UKLR 1.1, and the scope question in full is on who needs UK SRS.

The first periods caught are those beginning on or after 1 January 2027, and a company whose period began earlier may keep to the TCFD-aligned rules for it or adopt UK SRS early (¶3.19).

Your own first period depends on your year-end, and the UK SRS deadline page works it out month by month.

UK SRS remains available for voluntary use by any entity outside those categories.

Source: FCA PS26/19 ¶¶3.6–3.7
Category	Final rules
UKLR 6 — commercial companies	Comply or explain
UKLR 14 — secondary listing	Comply or explain
UKLR 15 — depositary receipts	Comply or explain
UKLR 16 — non-equity and non-voting equity shares	Comply or explain
UKLR 22 — transition	Comply or explain
UKLR 11, 12, 13, 17, 18, 19	Not in scope

Implementation

Seven things a listed company builds for comply or explain

None of these is a separate filing; each is a component of the annual financial report or the evidence behind it.

01 · Register

A comply-or-explain register

One line per disclosure area of UK SRS S1 and S2: comply, explain or relief, with the reason, the owner and the next step. It is the working file behind every explanation you publish.

02 · Scope 3

A Scope 3 data plan for the relief year

The relief is from disclosure, not from measurement. The period after it is comply or explain, so the relief year is when the data is built or the explanation drafted.

03 · Relief statement

The statement that you use a relief

UKLR TP 16.4R(2) and 16.5R(2) require a company using the Scope 3 or climate-first relief to say so in its annual financial report, naming the transitional provision and the paragraph of the standard.

04 · Location map

Where each disclosure sits

UKLR 6.6.6R(8)(c) asks where the disclosures and explanations can be found, and cross-references must meet UK SRS S1 ¶¶B45–B47. Map them before drafting, not after.

05 · Assurance statement

Whether anything was assured

State whether third-party assurance was obtained; if it was, name the provider, what was assured and to what level, the standards used and where any published report is (UKLR 6.6.6R(8)(d)).

06 · Transition plan statement

Whether you publish a plan

State whether a climate-related transition plan has been published and where, or why not (UKLR 6.6.6R(8)(e)). There is no duty to have one, and the statement does not apply to UKLR 14 or 15.

07 · Timetable

One timetable with the accounts

UK SRS S1 ¶64 puts the disclosures on the same day as the financial statements, and DTR 4.1.3R gives at most four months from year-end to make the annual financial report public.

The register is our suggestion, not an FCA requirement; everything else in the list traces to a rule or a standard cited on this page.

A pillar-by-pillar version of this list is the UK SRS compliance checklist, and board responsibility for the explanations is covered in UK SRS board oversight.

Assurance options are set out in sustainability assurance in the UK, and the transition-plan statement in transition plans in the UK.

Consequences

Who reads the explanations, and what follows

The FCA says it “will be responsible for monitoring and enforcing compliance with our rules for UK SRS and transition plan disclosures by listed companies, along with the FRC” (¶2.82).

It intends to provide updated information on its supervisory approach to UK SRS in the second half of 2027, in time for the first reporting season.

Respondents asked the FCA to say what a useful explanation looks like, and warned of the risk that comply or explain is read as mandatory compliance (¶2.84).

Explaining carries no assurance consequence: the assurance statement describes assurance where it was obtained, and it may cover explanations as well as disclosures.

The FCA says it will keep the case for mandating sustainability assurance under review, including through post-implementation monitoring of UK SRS.

The assurance standard a provider may use is the FRC’s ISSA (UK) 5000, effective for engagements on periods beginning on or after 15 December 2026 and mandatory for no one.

Explain is not a waiver

An explanation is itself a required statement under the listing rules.

The FCA monitors and enforces the rules with the FRC, and respondents to CP26/5 told it that effective supervision will be critical to the regime.

Still open

Technical Note 803.1: the guidance on explaining

The FCA is consulting on the guidance alongside the rules: “To help issuers apply the comply or explain rules, we are also consulting on Technical Note (TN) 803.1” (¶1.9).

Primary Market Bulletin 66 carries the draft and asks three questions, including whether respondents agree with the proposed expectations for explaining.

When TN 803.1 is finalised, the FCA proposes to withdraw TN 802.3, its technical note on the TCFD-aligned rules.

The dates of the webinar and the feedback deadline are on the PS26/19 landing page.

How the consultation stages fit together is on the UK SRS consultation, and every date in sequence on the UK SRS timeline.

To talk a specific explanation through, you can book a free 15-minute call.

The guidance timetable

30 Sep 2026
PS26/19 and PMB 66 published
Final rules, plus draft TN 803.1, updates to TN 801.4 and the proposed deletion of TN 802.3.
19 Oct 2026
FCA webinar
Announced on the PS26/19 page, on the updated requirements and the proposed Technical Note.
28 Oct 2026
Feedback deadline
Comments on TN 803.1, TN 801.4 and the TN 802.3 deletion, to primarymarketbulletin@fca.org.uk.
Not dated
Guidance finalised
The FCA aims to finalise it before the rules come into force (¶1.9).

Frequently asked

UK SRS comply or explain — frequently asked

What does comply or explain mean for UK SRS?

Under the FCA's final rules in PS26/19, published on 30 September 2026, a listed company in scope either includes disclosures prepared in accordance with UK SRS S1 and UK SRS S2 in its annual financial report, or includes a statement explaining what it has not disclosed and why. The FCA says its final rules "adopt a comply or explain approach across the UK SRS". The rules apply to accounting periods beginning on or after 1 January 2027, with first reporting in 2028.

Is UK SRS S2 mandatory for listed companies?

No. CP26/5 had proposed mandatory reporting against UK SRS S2, excluding Scope 3, but the final rules do not make it mandatory. PS26/19 applies comply or explain "across all categories of disclosures", climate included. Outside the listing rules, UK SRS remains available for voluntary use by any entity.

What must a UK SRS explanation contain?

For UK SRS S2, UKLR 6.6.6R(7A)(b) requires a statement setting out a summary of the UK SRS S2 disclosure requirements that have not been met, the reasons for not making those disclosures, and any steps the company is taking or plans to take to make them in future. For UK SRS S1, UKLR 6.6.6R(7B)(b) requires the relevant risks or opportunities that have not been disclosed and the reasons; a company that has identified no such risks or opportunities states that fact. The FCA's draft Technical Note 803.1 says an explanation can be short and proportionate but should not omit material information.

Does an explanation have to give a timeframe?

No. The made rule asks for any steps the company is taking or plans to take, not a date. The FCA's draft Technical Note 803.1 says it does not require an expected timeframe, but that where one is known or estimated it would be helpful to set it out. The old TCFD-aligned rule did ask for a timeframe; the new UK SRS S2 rule does not.

What changed between CP26/5 and PS26/19?

Three things. UK SRS S2 climate disclosures moved from a proposed mandatory basis to comply or explain. Companies with a secondary listing (UKLR 14) or depositary receipts (UKLR 15) must now report against UK SRS on a comply-or-explain basis, instead of the signposting statement CP26/5 proposed. And early adopters may now use the transitional reliefs. The start date, the one-year Scope 3 and two-year UK SRS S1 reliefs, and the transition-plan and assurance statements were kept as consulted on.

Can a company explain instead of disclosing Scope 3 emissions?

Yes. For a period beginning on or after 1 January 2027 but before 1 January 2028, a company may rely on the one-year Scope 3 relief and state that it is doing so, with no further explanation. From periods beginning on or after 1 January 2028 the relief has expired, and Scope 3 is either disclosed or explained under the comply-or-explain rule. PS26/19 sets no end date for the option to explain.

Can a company that explains still say it complies with UK SRS?

Not with that standard. UK SRS S1 paragraph 72 reserves the explicit and unreserved statement of compliance for disclosures that comply with all the requirements. The FCA's draft Technical Note 803.1 says an issuer cannot make that statement for a UK SRS standard if it explains against it, and UK SRS S1 paragraph 73A bars a company using the climate-first relief from asserting compliance with UK SRS S1. A company that meets UK SRS S2 in full, including by using the Scope 3 relief, can still state compliance with UK SRS S2.

Do secondary listings and depositary receipts have to comply or explain?

Yes. PS26/19 extends comply or explain to companies in the secondary listing (UKLR 14) and depositary receipts (UKLR 15) categories. The FCA says a company whose home-jurisdiction reporting aligns with the outcomes of UK SRS may already broadly comply and may rely on that reporting, but must explain wherever UK SRS requirements are not met in full. The transition-plan statement does not apply to these two categories.

Does a company have to obtain assurance over its UK SRS disclosures or explanations?

No. The company states whether or not it has obtained third-party assurance, and if it has, names the provider, what was assured and to what level, the assurance standards used and where any published assurance report can be found. The FCA is not requiring an explanation where no assurance was sought, and says it will keep the case for mandating sustainability assurance under review.

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.

Financial Conduct Authority
PS26/19: Aligning listed issuers' sustainability disclosures with international standards (PDF)
The final rules, September 2026: comply or explain across UK SRS (¶¶1.2, 1.7), TCFD rules replaced (¶1.10), scope (¶¶3.6–3.7), dates and reliefs (¶¶3.12–3.25), and the made instrument in Appendix 1 (UKLR 6.6.6R(7A)–(8), TP 16).
Financial Conduct Authority
PS26/19 landing page
First published 30 September 2026: comply or explain across UK SRS; Technical Note feedback by 28 October 2026; FCA webinar on 19 October 2026; supervisory information in the second half of 2027.
Financial Conduct Authority
Draft Technical Note 803.1 — UK SRS sustainability disclosures for listed companies (PDF, for consultation)
Draft guidance: what an explanation must contain, proportionality, the statement of compliance (Annex 1) and four illustrative explanations (Annex 2).
Financial Conduct Authority
Primary Market Bulletin 66 — draft Technical Note 803.1 (comply or explain)
Published 30 September 2026: consults on TN 803.1, TN 801.4 updates and deleting TN 802.3; comments to primarymarketbulletin@fca.org.uk by 28 October 2026; nine preparation steps.
Financial Conduct Authority
CP26/5 consultation paper (PDF)
The proposal PS26/19 answers: mandatory UK SRS S2 (excluding Scope 3), the signposting statement for UKLR 14 and 15, and the ~600 estimate at Annex 2 ¶43.
FCA Handbook
UKLR 6.6 — annual financial report (commercial companies)
UKLR 6.6.6R: today (8) is the TCFD-aligned comply-or-explain rule; from 1 January 2027 PS26/19 inserts (7A) UK SRS S2 and (7B) UK SRS S1 on comply or explain, and recasts (8) as the location, assurance and transition-plan statements.
FCA Handbook
DTR 4.1 — annual financial report
DTR 4.1.3R (make the annual financial report public at the latest four months after year-end) and DTR 4.1.8R (principal risks and uncertainties).
Department for Business and Trade
UK SRS S1 General Requirements (PDF)
¶¶3, 18 (materiality), 25 (core content), 60–64 (location and timing), 72–73B (compliance statement), E3 (climate-first).
Department for Business and Trade
UK SRS S2 Climate-related Disclosures (PDF)
¶29 (GHG Protocol measurement), B59A (financed emissions), C3–C4 (first-year and Scope 3 reliefs).
Department for Business and Trade
UK Sustainability Reporting Standards — guidance
"Available for voluntary use, by any entity that chooses to do so."
GHG Protocol
Corporate Accounting and Reporting Standard
The Scope 1 and 2 measurement basis UK SRS S2 ¶29 names.
Financial Reporting Council
ISSA (UK) 5000 (PDF)
The FRC assurance standard a provider may use if a company seeks assurance; mandatory for no one.
FCA Handbook
UKLR 1.1 — the listing categories
The chapter titles of UKLR 6, 11–19 and 22, which define who is in and out of scope.