Is UK SRS S2 Mandatory? Voluntary Use, the FCA's Final Rules and the 2027 Timeline

The FCA published its final rules in PS26/19, following the CP26/5 consultation. They apply UK SRS S1 and S2 on a comply or explain basis, not the mandatory S2 climate core that CP26/5 proposed.

The Department for Business and Trade published final UK SRS S1 and UK SRS S2 on 25 February 2026. The accompanying guidance states that the standards are available for voluntary use by any entity that chooses to do so.

Voluntary use can support investor communication, lender requirements, group alignment, customer requests and readiness for the 2027 listing rules or future company-law rules. It does not itself change an entity’s statutory reporting obligations. The basis of preparation should therefore say whether the entity is making an explicit UK SRS compliance claim, using selected requirements, or preparing a UK SRS-aligned climate section without such a claim.

Listed-company TCFD-aligned rules continue to apply to accounting periods beginning before 1 January 2027. Current listing rules require an annual statement about whether climate-related financial disclosures are consistent with the TCFD Recommendations and Recommended Disclosures, together with location information and explanations for non-disclosure where relevant.

The existing listed-company categories covered by the FCA’s current TCFD-aligned framework include the commercial companies, international commercial companies secondary listing, depositary receipts, non-equity shares and non-voting equity shares, and transition categories. Separate FCA TCFD-aligned entity- and product-level rules also apply to in-scope asset managers, life insurers and FCA-regulated pension providers.

An issuer should not stop applying current TCFD rules because UK SRS S2 or PS26/19 has been published. Under the final rules, the TCFD-aligned rules continue for accounting periods beginning before 1 January 2027, unless the issuer voluntarily adopts UK SRS under the FCA’s early-adoption provisions.

The Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022 and the corresponding LLP regulations introduced mandatory climate-related financial disclosures for specified large UK entities for financial years beginning on or after 6 April 2022.

The government guidance identifies in-scope categories including relevant public interest entities with more than 500 employees, AIM companies with more than 500 employees, and other UK companies or LLPs with more than 500 employees and turnover above £500 million, subject to the detailed statutory tests. The disclosures are made through the strategic report or the relevant LLP reporting location.

The government response also confirms that UK SRS S2 is a national reporting framework for the purposes of section 414CB(6) of the Companies Act. A company applying it can avoid duplicating relevant section 414CB climate disclosures if the remaining statutory conditions are met and the use of UK SRS S2 is clearly referenced in the relevant statement.

This interoperability point does not make UK SRS S2 generally mandatory. An entity can be subject to current company-law climate disclosures and use UK SRS S2 as the reporting framework, but it must still test statutory scope, content and report-location requirements separately.

PS26/19 applies UK SRS S2 on a comply or explain basis for all in-scope categories, Scope 3 included. CP26/5 had proposed a mandatory climate core with Scope 3 on comply or explain; the final rules put the whole of S2 on the same basis. After the optional one-year relief for periods beginning in 2027, an issuer that does not disclose Scope 3 must summarise what has not been met, explain why and state any steps planned to enable disclosure.

That is different from a general option to ignore Scope 3. The rule creates an obligation either to provide the information or to explain the gap. Neither an explanation nor a relief automatically supports an explicit and unreserved UK SRS compliance statement, because a regulatory comply or explain outcome is not automatically the same as complete compliance with the standards.

The government response and the May 2026 Regulatory Initiatives Grid placed the future role of UK SRS within the Companies Act 2006 in the Modernising Corporate Reporting programme. Its consultation, published on 7 September 2026 and closing on 30 November 2026, proposes no thresholds and no commencement dates for private-company application. No general UK SRS company-law requirement has been enacted.

Companies should monitor this route separately from FCA rules. A future Companies Act regime may have different scope thresholds, report-location requirements, transition reliefs and effective dates. It should not be assumed that the FCA's listing rules will be copied directly into company law.

Step 1 - Are you choosing UK SRS S2 voluntarily? If yes, define the intended claim, report location, relief use and relationship to existing legal reporting.

Step 2 - Are you currently within FCA TCFD-aligned listed-company or regulated-firm rules? If yes, continue to meet those rules for the applicable period and prepare a controlled transition map.

Step 3 - Are you within the 2022 company or LLP climate regulations? If yes, preserve the statutory scope and strategic-report requirements even where UK SRS S2 is used voluntarily.

Step 4 - Are you in a listing category covered by PS26/19 (UKLR 6, 14, 15, 16 or 22)? Plan comply or explain reporting for accounting periods beginning on or after 1 January 2027, decide on the 2027 reliefs and track the Technical Note 803.1 consultation.

Step 5 - Are you a non-listed company outside current statutory thresholds? UK SRS S2 remains voluntary unless another contractual, group, lender or sector requirement applies.