Comply or explain is a disclosure about your data

A rule that lets a company say nothing still makes it say why.

That is the shape of the regime the FCA settled on. CP26/5, which opened on 30 January 2026 and closed on 20 March, proposed making UK SRS S2 climate disclosures mandatory with Scope 3 emissions carved out. PS26/19, published on 30 September 2026 and last updated on 13 October, does not do that. Every category of disclosure, S1 and S2 alike, sits on comply or explain. The TCFD-aligned rules that listed issuers have reported against are replaced, the TCFD having been disbanded in 2023.

Read quickly, that is a softening. Read properly, it moves the burden from the disclosure to the explanation, and the explanation is where a data function gets examined in public for the first time.

What was decided, and when it bites

The rules apply to five listing categories: commercial companies, transition, non-equity shares or non-voting equity shares, international commercial companies with a secondary listing, and depositary receipts. Closed-ended investment funds, open-ended investment companies, shell companies and issuers of debt and debt-like securities are outside the scope. Secondary-listed and depositary receipt issuers were originally going to signpost their home-jurisdiction disclosures; in the final rules they report against UK SRS on the same comply or explain basis as everyone else.

Milestone	Date	What it means
Final UK SRS S1 and S2 published by government	25 February 2026	Available for voluntary use by any entity, listed or not
Draft guidance consultation closes	28 October 2026	GC26/6, in Primary Market Bulletin 66, consults on Technical Note 803.1 and the detail expected when an issuer chooses to explain
Rules apply	Accounting periods beginning on or after 1 January 2027	First UK SRS reporting lands in 2028. Until then, issuers still state whether they made TCFD-consistent disclosures or explain why not
Scope 3 relief ends	Periods beginning on or after 1 January 2028	One year of deferral, first reported in 2029. Using the relief must be stated in the annual report, though the reason need not be
UK SRS S1 relief ends	Periods beginning on or after 1 January 2029	Two years of deferral on the wider sustainability disclosures, first reported in 2030
FCA supervisory approach published	Second half of 2027	Published ahead of the first reporting season, after firms have built for it

The reliefs are generous on time and narrow on cover. Comparatives are not required in the first UK SRS year, and an alternative greenhouse gas measurement methodology may be kept for one year from initial application. None of it removes the obligation to account for what is missing.

The explain route is an evidence route

Draft Technical Note 803.1 is the document to read, not the policy statement. Under it, an explanation covers the disclosures not made or the sustainability risks and opportunities omitted, the reasons for the omission, and the steps taken or planned to make the disclosures in future. A timeframe is not required, but issuers are encouraged to give one where they know it. The explanation is expected to be proportionate and specific rather than requirement by requirement.

Set that against the ordinary reasons a company cannot disclose. It cannot trace an emissions figure to a source it controls. It holds supplier data in a form it cannot reconcile. It has a metric but no owner, no definition that survives a change of system, and no lineage from the reported number back to where it was created. Each of those becomes a sentence in the annual report, and the sentence after it describes the remediation plan.

The FCA has also closed the obvious escape. Where an issuer has obtained third-party assurance over sustainability information, it must disclose that it did, which disclosures were assured and to what level, the standard used, and where the assurance report can be found. Assurance is not mandatory, and the FCA says it will keep that under review. What is mandatory is being clear about how much of your reporting nobody independent has looked at.

This is a Critical Data Elements problem wearing new clothes

Primary Market Bulletin 66 lists developing the data, metrics and targets needed to support UK SRS disclosures as a preparation step. That sentence is doing more work than its length suggests, because the work is the same work a regulated firm already knows how to do and has usually done only for financial and risk reporting.

The method transfers directly. Identify the data elements that carry the disclosures, which for most issuers means emissions by scope, energy, supply chain spend used as a proxy, physical asset and location data, and the forward-looking assumptions behind any transition plan. Name an owner for each one who is accountable for its quality rather than its production. Capture lineage from source system to reported figure, including the estimation steps, because an estimate with a documented method is disclosable and an estimate without one is not. Set quality thresholds that trigger a decision instead of a comment.

There is no digital tagging requirement in the rules and no obligation to build a transition plan, though an issuer that has one must say so and say where it is, and one that does not must explain why. The absence of tagging is a reprieve for this cycle rather than a direction of travel: the Basel Committee has already approved machine-readable Pillar 3 disclosure, and comparable datasets tend to arrive after comparable narratives.

The scope question is also still open beyond the listed perimeter. The government has said it and the FCA will consider whether to require certain UK entities to report against the standards, and the Department for Business, Innovation, Science and Trade is consulting until 30 November 2026 on modernising corporate reporting, including a new very large company threshold that could be applied to non-financial reporting requirements. Private equity portfolio companies and large private groups should assume the question reaches them before the standards change again.

Five questions before the next board meeting

For each UK SRS disclosure we expect to make, can we trace the reported figure to a source system, and who owns that figure by name?
Which disclosures do we already know we will explain rather than make, and has anyone drafted that explanation so we can see how it reads?
Where we estimate, is the method documented well enough to disclose, and would it survive a change of supplier or system?
What proportion of our sustainability reporting has had third-party assurance, and are we content to publish that proportion?
Who is accountable for closing the Scope 3 data gap before periods beginning 1 January 2028, and what have they been given to close it with?

The first time a company explains itself, the explanation becomes the disclosure, and boards should decide now what they want it to say.

What was decided, and when it bites

The explain route is an evidence route

This is a Critical Data Elements problem wearing new clothes

Five questions before the next board meeting

Sources