UK regulator declines to strengthen climate disclosures — Cyprus Mail
London – The Financial Conduct Authority (FCA) has scrapped a plan to make climate‑risk disclosures mandatory for companies listed on the UK stock exchange, opting instead to retain a “comply or explain” regime, the…
Source: UA.NEWS · October 4, 2026 at 3:32 PM · AI-assisted report
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LONDON, 4 OCTOBER 2026 —
London – The Financial Conduct Authority (FCA) has scrapped a plan to make climate‑risk disclosures mandatory for companies listed on the UK stock exchange, opting instead to retain a “comply or explain” regime, the regulator said in rules published this week.
Market Impact
The FCA said responses to its January proposal raised doubts about whether compulsory application of the UK Sustainable Reporting Standard S2 (UK SRS S2) would be proportionate or support the international competitiveness of firms operating in the United Kingdom. The regulator noted that companies had highlighted the costs of the new requirements and their potential impact on competitiveness.
The January draft would have required listed issuers to disclose financially material climate‑related risks and opportunities, climate targets and the likely impact of climate change on business operations in line with the UK‑approved version of the International Sustainability Standards Board’s climate standard. Under the final rules, issuers may either meet the disclosure obligations or explain why they do not, preserving the “comply or explain” approach first introduced in 2020 for premium‑listing companies.
Those 2020 rules required firms to provide information consistent with the Task Force on Climate‑related Financial Disclosures (TCFD) recommendations or explain any omission, and were later extended to other listed categories.
The FCA’s review of the 2025 annual reports of FTSE 350 companies found that 92 % complied with the TCFD requirements, indicating a high level of existing disclosure. By maintaining the optional‑explanation model, the regulator aims to balance climate‑risk transparency with concerns about cost and global competitiveness, leaving firms to decide whether to adopt the new UK SRS S2 standards or provide an explanation for non‑compliance.
Related: Financial Conduct Authority · London