UK Climate Disclosure Rules: What You Need to Know

United Kingdom climate disclosure at a glance

The UK government published the final UK Sustainability Reporting Standards (UK SRS S1 and UK SRS S2) on 25 February 2026. The Financial Conduct Authority (FCA) published its final rules in Policy Statement PS26/19 in September 2026: listed companies report against UK SRS S1 and S2 on a comply-or-explain basis for accounting periods beginning on or after 1 January 2027, with first reports in 2028.

The UK already requires climate reporting from large companies under the Companies Act and from listed companies under the Listing Rules. UK SRS replaces the TCFD-aligned listing rule and keeps its comply-or-explain approach: a listed company makes each UK SRS disclosure or explains in its annual financial report why it has omitted it.

Below: what the rules require, and how to prepare.

How the UK got here: three layers of climate reporting

The UK built its climate reporting rules in three layers between 2019 and 2022. The energy and carbon layer and the Companies Act layer remain in force; UK SRS replaces the listing rule layer from 2027.

• 2019, energy and carbon reporting. Streamlined Energy and Carbon Reporting requires quoted companies, large unquoted companies, and large limited liability partnerships to disclose annual energy use and Scope 1 and Scope 2 emissions, with an intensity ratio, for financial years beginning on or after 1 April 2019.

• 2021, listed companies. The FCA's Listing Rules require listed commercial companies to state in their annual financial report whether they have made TCFD-consistent disclosures, and to explain any gaps. Premium listed companies started with accounting periods beginning 1 January 2021, standard listed companies a year later. This rule covers accounting periods beginning before 1 January 2027; UK SRS applies from then on.

• 2022, large companies. The Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022 require companies with more than 500 employees that are traded, quoted on AIM, banks, or insurers, or that have turnover above £500 million, to report against eight climate disclosure items for financial years beginning on or after 6 April 2022.

What the UK's climate disclosure rules require

Under the FCA's final rules, listed companies report against UK SRS S1 and S2 in their annual financial report, alongside their financial statements, on a comply-or-explain basis. Where a company leaves out a disclosure, its annual financial report must list the UK SRS requirements it has not met, the reasons, and the steps it is taking or plans to take to meet them. The FCA is consulting until 28 October 2026 on guidance on how much detail to give, with examples (Technical Note 803.1).

• UK SRS S1 (General Requirements): the disclosure architecture. Companies report material information about sustainability-related risks and opportunities that are reasonably expected to affect cash flows, access to finance, or cost of capital. Under the climate-first relief, non-climate disclosures can wait two years.

• UK SRS S2 (Climate-related Disclosures): the climate-specific requirements, built on the four pillars, including absolute gross Scope 1, Scope 2, and Scope 3 emissions in tonnes of CO2 equivalent. Scope 3 can wait one year under a transitional relief. A company using either relief states this in its annual financial report, with no further explanation needed during the relief period.

• The Greenhouse Gas Protocol as the measurement standard: UK SRS S2 paragraph 29(a)(ii) requires emissions to be measured in accordance with the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard (2004). A company that used a different method in the prior year can keep it for one period under paragraph C3.

• The Land Sector and Removals Standard: the GHG Protocol's Land Sector and Removals (LSR) Standard sets how companies account for greenhouse gas emissions from land use and land-use change, and for carbon removals such as carbon stored in soil. It applies from 1 January 2027 to companies with significant land-based activities in their operations or value chain, such as farming or buying, processing or selling agricultural products. UK SRS points to one specific GHG Protocol document, the 2004 Corporate Standard, and does not refer to the LSR Standard. A UK food or agriculture group can therefore comply with UK SRS without applying LSR. The requirement to apply LSR comes from the GHG Protocol itself: a company that claims its inventory conforms with the GHG Protocol must apply LSR from 1 January 2027 if it has significant land-sector emissions or reports carbon removals.

  Check whether it applies to you: Does the Land Sector and Removals Standard apply to your company? If it does, read 7 things you need to know about reporting land emissions with imperfect data and watch the webinar on how to start despite imperfect data.

• Transition plans: companies in the commercial companies, non-equity shares, and transition categories state in their annual financial report whether they have a climate-related transition plan and where to find it, or explain why they have none. Producing a plan remains the company's choice.

The four UK amendments to the ISSB text: no effective date (companies apply the standards when UK law requires or when they choose to); a two-year climate-first relief for non-climate disclosures; Scope 3 and alternative-measurement reliefs, which the FCA's rules set at one year; and optional references to SASB industry standards and the GICS classification.

Who is in scope

The FCA's final rules apply to five listing categories, all on a comply-or-explain basis.

Domestic listed companies

• Commercial companies (UKLR 6): the main equity category since the July 2024 listing reform.

• Non-equity shares and non-voting equity shares (UKLR 16).

• Transition category (UKLR 22): former standard listed companies yet to move to the commercial companies category.

These three categories cover 515 companies with an aggregate market capitalisation of £3.8 trillion on the London Stock Exchange Main Market, according to the cost benefit analysis in the FCA's consultation paper.

Overseas companies

Overseas companies whose main listing is in another country but whose shares, or certificates representing them, also trade on the London Stock Exchange, 89 in total, also report against UK SRS on a comply-or-explain basis and make the same assurance statement. The FCA calls these the secondary listing (UKLR 14) and depositary receipts (UKLR 15) categories. Where their home-country reporting meets UK SRS outcomes, they can rely on it and explain any gaps. The transition plan statement applies to domestic listed companies only.

Private companies

The government will consider whether to require private companies to report under UK SRS in a separate exercise. Its Modernising Corporate Reporting consultation, published 7 September 2026 and closing 30 November 2026, proposes no UK SRS requirements and states that the government intends to consult separately on which companies should be in scope.

Key dates and milestones

Comparative information is not required in the first period. Companies with an accounting period beginning before 1 January 2027 can keep the TCFD-aligned rules for that period or adopt UK SRS early, with the same transitional reliefs.

How companies should prepare

Calendar-year listed companies start their first UK SRS reporting year on 1 January 2027, and the greenhouse gas inventory is the slowest part to build.

• Establish your greenhouse gas inventory on the GHG Protocol. Companies reporting under Streamlined Energy and Carbon Reporting already have Scope 1 and Scope 2 data; the gap is Scope 3 by category, and the one-year transitional relief is preparation time.

• Plan your comply-or-explain position. Map each UK SRS S1 and S2 requirement to the data you hold today. Every requirement you cannot meet for 2027 needs an explanation in the annual financial report, where investors read it alongside peers that disclose in full.

• Build assurance-ready processes early. The FCA requires every listed company to state publicly whether it obtained assurance, and investors will read the difference. Methodology documentation, source-data traceability, and review controls need to be in place during measurement so that a limited assurance engagement is a decision, with the evidence ready.

• Build on the frameworks you already use. The four TCFD pillars carry directly into UK SRS S2, and existing Companies Act climate disclosures, CDP responses, and EU Corporate Sustainability Reporting Directive work map onto the standard. The new work is the metrics: Scope 3, industry-specific metrics, and scenario analysis.

How Terrascope can help

Terrascope's AI-powered platform helps companies operating in the UK move from baseline emissions data to audit-ready disclosures, including Princes Group, the Liverpool-headquartered food and drink group that went from deadline crunch to SBTi-validated Forest, Land and Agriculture targets in three and a half months.

• Scope 1, 2, and 3 emissions measurement. Integrations pull emissions data from your source systems monthly, so your inventory stays current across every entity in scope and every Scope 3 category you need before the relief ends.

• Audit-ready reporting. Audit Trail makes every figure traceable from data entry to disclosure, with assurance-provider access built in, so your assurance transparency statement can say "yes".

• Supply-chain intelligence. Analytics shows you where your Scope 3 hotspots sit before the comply-or-explain decision, so the transitional relief becomes reduction planning time.

• Multi-framework alignment. ISSB Reporting drafts your UK SRS S1 and S2 disclosures from your measured data, reviewed by your team, ready for the annual financial report.

Frequently asked questions

Speak to an expert

Are you ready to get ahead of the UK's UK SRS requirements? Speak to a Terrascope expert and see how we help companies move from baseline emissions data to audit-ready disclosures.