The International Regulatory Strategy Group (IRSG) has submitted a response to the FCA's consultation on proposals to align listed issuers' sustainability disclosures with international standards (CP26/5), including the introduction of UK Sustainability Reporting Standards (UK SRS) aligned with the International Sustainability Standards Board (ISSB) standards.
In its response, the IRSG expresses strong support for global alignment of sustainability reporting standards, while emphasising the importance of proportionality, interoperability and sufficient implementation time for UK-listed companies. The response builds on the IRSG's previous work on ISSB adoption and the UK's sustainability reporting framework, including the IRSG's report in partnership with Clifford Chance from March 2025: Harmonising Sustainability Disclosures: A Roadmap for the Adoption of ISSB Standards.
Key points from the response include:
- Support for aligning UK sustainability disclosure requirements with the ISSB standards, replacing the existing TCFD‑aligned rules.
- Majority of IRSG members support the mandatory application of UK SRS S2 climate‑related disclosures, subject to adequate transition periods and proportional implementation. Some members favour a phased implementation based on company size.
- Endorsement of a ‘comply or explain’ approach for Scope 3 emissions and non‑climate sustainability disclosures under UK SRS S1 by the majority of IRSG members.
- The importance of maintaining a level playing field between listed and non‑listed companies, and avoiding divergence from international approaches that could disadvantage UK‑listed firms.
- Support for transparency on voluntary third‑party assurance, while cautioning against mandating assurance before the market is sufficiently mature.
- Recognition of the potential benefits of digital tagging, alongside concerns that the market is not yet ready for mandatory digital sustainability reporting.
The IRSG encourages the FCA and the UK government to ensure that the final framework delivers a coherent, proportionate and internationally interoperable approach to sustainability reporting that supports high‑quality, decision‑useful disclosures without imposing unnecessary burdens on UK issuers.
TheCityUK jointly runs the IRSG with the City of London Corporation to promote sustainable economic growth and an international framework that facilitates open and competitive capital markets globally.
TheCityUK jointly runs the IRSG with the City of London Corporation to promote sustainable economic growth and an international framework that facilitates open and competitive capital markets globally.