From TCFD to UK SRS: What Changes for UK Organisations

What Changes for UK Organisations

The UK’s sustainability reporting landscape is undergoing its most significant transformation since climate-related disclosures first became mandatory for listed companies in 2022. The Task Force on Climate-related Financial Disclosures (TCFD) – the framework that has underpinned UK corporate climate reporting for the past four years – is being replaced by the UK Sustainability Reporting Standards (UK SRS).

For UK organisations currently reporting under TCFD, this is not a distant policy discussion. The FCA has proposed mandatory UK SRS S2 climate disclosures for listed companies from accounting periods beginning on or after 1 January 2027, with a final Policy Statement expected in autumn 2026.

This article explains why the change is happening, what is different between TCFD and UK SRS, who is affected, and what UK organisations should be doing now to prepare.

Why Is TCFD Being Replaced?

The TCFD was established by the Financial Stability Board (FSB) in 2015 to develop a voluntary framework for climate-related financial disclosures. It introduced the four-pillar structure – Governance, Strategy, Risk Management, and Metrics and Targets – that has shaped climate reporting globally.

In the UK, TCFD-aligned reporting became mandatory for premium listed companies from January 2021, extending to standard listed companies, asset managers and FCA-regulated asset owners from January 2022. Large private companies with over 500 employees and £500 million in turnover or balance sheet total also became subject to TCFD-aligned requirements under the Companies Act 2006.

However, the TCFD was always intended as a transitional framework. In July 2023, the FSB announced that the work of the TCFD had been completed, with the International Sustainability Standards Board (ISSB) standards – IFRS S1 and IFRS S2 – fully incorporating its recommendations. The TCFD formally disbanded in October 2023.

The ISSB was established at COP26 in Glasgow in 2021 with a specific mandate to unify fragmented climate and sustainability reporting frameworks – including the TCFD – into a single, globally consistent baseline. Around 40 jurisdictions covering approximately 40% of global capital markets are now planning to adopt or use ISSB-aligned standards.

The UK is one of them. Rather than retaining TCFD-aligned rules alongside a disbanded framework, the UK government and the FCA are transitioning to UK-endorsed versions of the ISSB standards: the UK Sustainability Reporting Standards.

What Are the UK Sustainability Reporting Standards?

The UK Sustainability Reporting Standards (UK SRS) were published in final form by the Department for Business and Trade (DBT) on 25 February 2026. Two standards have been issued:

UK SRS S1 – General Requirements for Disclosure of Sustainability-related Financial Information Sets out the overarching framework for sustainability-related disclosures, including requirements on all material sustainability risks and opportunities – not just climate. This extends beyond TCFD’s climate-only scope to cover areas such as biodiversity, water, workforce risks, human rights and supply chain resilience.

UK SRS S2 – Climate-related Disclosures Covers climate-specific risks and opportunities, incorporating and building on the TCFD recommendations. UK SRS S2 retains the familiar four-pillar structure (Governance, Strategy, Risk Management, Metrics and Targets) but adds more prescriptive requirements, including detailed Scope 1, 2 and 3 emissions disclosure, scenario analysis, transition plan information and industry-based metrics.

The UK SRS are closely aligned with the ISSB’s IFRS S1 and IFRS S2, with only six minor UK-specific amendments to maintain near-perfect alignment with the global baseline while ensuring applicability in a UK context.

What Is the FCA’s Proposed Timeline?

On 30 January 2026, the FCA published Consultation Paper CP26/5: Aligning listed issuers’ sustainability disclosures with international standards. The consultation closed on 20 March 2026.

The proposed implementation timeline is phased across three stages:

From 1 January 2027 – UK SRS S2 Climate Disclosures (Mandatory)

• Mandatory climate reporting under UK SRS S2 replaces TCFD-aligned listing rules
• Scope 1 and 2 emissions disclosure is mandatory
• Scope 3 emissions disclosure is on a comply-or-explain basis (with an optional one-year transitional deferral)
• UK SRS S1 (general sustainability) is on a comply-or-explain basis (with an optional two-year transitional deferral)
• Transition plan disclosure operates on a disclose-or-explain basis – companies must state whether they have published a transition plan and where it can be found.

From 1 January 2028 – Scope 3 Comply-or-Explain

• Scope 3 (value chain) emissions disclosure moves to comply-or-explain with no further transitional relief
• UK SRS S1 remains in its second and final year of transitional relief.

From 1 January 2029 – UK SRS S1 Comply-or-Explain

• UK SRS S1 general sustainability disclosures move to comply-or-explain with no further transitional relief
• Full UK SRS framework is in effect.

The FCA aims to publish a final Policy Statement in autumn 2026, with the rules coming into force from 1 January 2027.

Who Is in Scope?

The FCA’s proposals apply to UK listed companies across the following listing categories:

• Commercial companies (UKLR 6) – full UK SRS reporting
• Transition category (UKLR 22) – full UK SRS reporting
• Non-equity shares and non-voting equity shares (UKLR 16) – full UK SRS reporting
• Secondary listing (UKLR 14) – lighter-touch transparency requirements
• Depositary receipts (UKLR 15) – lighter-touch transparency requirements.

The FCA’s cost-benefit analysis estimates that approximately 500 listed companies will be in scope for the initial wave of mandatory UK SRS reporting.

Companies currently subject to TCFD-aligned listing rules are the primary transition population. For these organisations, UK SRS S2 builds directly on TCFD, using the same four-pillar structure. However, KPMG has noted that compliance with UK SRS will “inevitably require more work than existing TCFD-aligned reporting”, given that IFRS S1 and S2 expand on TCFD with additional requirements such as quantification of sustainability-related risks and opportunities, connectivity with financial statements and industry-based metrics.

Important for wider UK organisations: The UK government has indicated it will consult separately later in 2026 on which non-listed entities – including large private companies – will be required to apply UK SRS, and when. This means the scope of mandatory UK SRS reporting is expected to widen beyond listed companies over time.

What Is Different Between TCFD and UK SRS?

For organisations already reporting under TCFD, the conceptual ground of UK SRS S2 is familiar. The four-pillar framework is retained. However, there are material differences in depth, scope and prescription:

The single most substantive change beyond climate is the introduction of UK SRS S1, which extends the disclosure lens to all material sustainability matters – including biodiversity and ecosystem dependencies, water availability, workforce risks, human rights and resource scarcity. This goes significantly beyond anything TCFD required.

What Does This Mean for SECR?

It is important to distinguish between TCFD and SECR in this transition. SECR (Streamlined Energy and Carbon Reporting) is a separate UK statutory requirement that applies to quoted companies, large unquoted companies and large LLPs. SECR requires organisations to disclose energy consumption, Scope 1 and 2 greenhouse gas emissions, intensity ratios and energy efficiency actions in their Directors’ Reports.

SECR is not directly affected by the TCFD to UK SRS transition. It remains in force as a standalone obligation. However, over time, UK SRS is expected to consolidate and – in part – supersede the current patchwork of TCFD-aligned listing rules, SECR and the climate-related disclosure requirements in the Companies Act.

For now, organisations subject to both SECR and TCFD (or UK SRS from 2027) will need to continue meeting both sets of requirements, though there is significant overlap in the underlying emissions data.

For a detailed explanation of SECR and UK carbon reporting obligations, see our guide: UK Carbon Emission Reporting Requirements Explained.

What Should UK Organisations Do Now?

With the proposed mandatory date of 1 January 2027 less than seven months away, preparation needs to be underway now. BCLP has noted that “meaningful preparation needs to be underway by the summer, and most companies are not yet where they need to be.”

The following actions are relevant for organisations currently reporting under TCFD or expecting to come into scope:

Review existing TCFD disclosures against UK SRS S2 requirements Identify gaps between current TCFD-aligned reporting and the more prescriptive requirements of UK SRS S2, particularly around financial impact quantification, industry-based metrics, scenario analysis and connectivity with financial statements.

Assess Scope 3 readiness Scope 3 emissions disclosure moves to comply-or-explain from 2027 (with an optional one-year deferral to 2028). Organisations that have not yet begun measuring value chain emissions should start building data collection processes and supplier engagement frameworks now.

Consider UK SRS S1 implications Although UK SRS S1 (general sustainability disclosures) is on a comply-or-explain basis with transitional relief until 2029, organisations should begin scoping the broader sustainability risks and opportunities that S1 covers – including biodiversity, water, workforce and supply chain matters.

Prepare a transition plan statement Under the FCA’s proposals, companies must include a statement in their annual report explaining whether they have published a climate-related transition plan and where it can be found. This is a disclose-or-explain requirement from 2027.

Integrate sustainability and financial reporting processes UK SRS requires connectivity between sustainability disclosures and financial statements. This means sustainability reporting can no longer sit in isolation from the finance function – data, governance and assurance processes need to be aligned.

Monitor the FCA Policy Statement The final rules are expected in autumn 2026. Organisations should track the Policy Statement for any changes from the consultation proposals, particularly around Scope 3 timing, transitional reliefs and the treatment of secondary listings.

The Bigger Picture – Where UK Reporting Is Heading

The transition from TCFD to UK SRS is part of a broader global convergence in sustainability reporting. The ISSB standards provide a common baseline that is being adopted or adapted across major capital markets, including Japan, Singapore, Hong Kong, Australia and now the UK.

In the UK, this transition consolidates what has been a fragmented landscape – TCFD for listed companies, SECR for large companies and LLPs, and various voluntary frameworks – into a more coherent, internationally aligned disclosure architecture.

For UK organisations, the direction of travel is clear. Climate reporting is becoming more standardised, more prescriptive and more integrated with financial reporting. Organisations that invest in the quality and governance of their underlying emissions and sustainability data now will be better positioned to meet current obligations and adapt as requirements continue to expand.

Frequently Asked Questions

Has TCFD been replaced?

The TCFD framework was formally disbanded in October 2023, with the ISSB taking over responsibility for climate-related disclosure monitoring. In the UK, TCFD-aligned listing rules remain in force for 2026, but the FCA has proposed replacing them with mandatory UK SRS S2 climate disclosures from accounting periods beginning on or after 1 January 2027.

What replaces TCFD in the UK?

UK SRS S2 (Climate-related Disclosures) replaces TCFD as the primary climate disclosure framework for UK listed companies. UK SRS S2 is based on IFRS S2, which fully incorporates and expands on the TCFD recommendations. The four-pillar structure (Governance, Strategy, Risk Management, Metrics and Targets) is retained.

When does UK SRS become mandatory?

The FCA has proposed mandatory UK SRS S2 climate disclosures for in-scope listed companies from accounting periods beginning on or after 1 January 2027. Scope 3 emissions move to comply-or-explain from 2028, and UK SRS S1 (general sustainability) from 2029. The final Policy Statement is expected in autumn 2026.

Does UK SRS affect SECR reporting?

Not directly. SECR remains in force as a standalone statutory obligation for quoted companies, large unquoted companies and large LLPs. However, over time UK SRS is expected to consolidate parts of the current reporting patchwork, including SECR and TCFD-aligned listing rules.

Is UK SRS the same as ISSB?

UK SRS is the UK-endorsed version of the ISSB standards (IFRS S1 and IFRS S2), with six minor UK-specific amendments. The standards are closely aligned, meaning organisations that have invested in ISSB-aligned reporting will find that their work translates directly to UK compliance.

Do I need to report Scope 3 emissions under UK SRS?

Scope 3 emissions disclosure under UK SRS S2 is on a comply-or-explain basis, with an optional one-year transitional deferral. This means listed companies in scope must either disclose their Scope 3 emissions or explain why they have not done so. Full mandatory Scope 3 reporting has not been proposed at this stage.

Written by Tim Holman – Head of Consultancy, MSc, MEng, CEng, MEI

Tim directs TEAM’s consultancy practice, applying 25+ years in strategy, audits, metering, and compliance to deliver robust, audit-ready results for customers. A Chartered Energy Engineer and Member of the Energy Institute, Tim holds an MSc in Energy Conservation and the Environment from Cranfield University and an MEng in Mechanical Engineering from the University of Salford.

Key Reference Sources

FCA Sustainability Reporting Requirements – the FCA’s summary timeline from TCFD to UK SRS.

FCA CP26/5: Aligning listed issuers’ sustainability disclosures with international standards – the FCA consultation proposing mandatory UK SRS for listed companies

UK Sustainability Reporting Standards: UK SRS S1 and UK SRS S2 – the final standards published by DBT on 25 February 2026

UK Sustainability Reporting Standards guidance and documents – GOV.UK collection including consultation outcomes and PIC minutes

Good Practice Guide: TCFD Reporting 2024–25 – HM Treasury guidance for organisations still completing TCFD-aligned reports