ICAS backs FCA’s UK SRS plan but warns on proposed reliefs

The Institute of Chartered Accountants of Scotland (ICAS) supports the FCA’s plan to refocus listed-company sustainability reporting around the UK Sustainability Reporting Standards (UK SRS), aligning UK rules with IFRS sustainability standards. ICAS welcomed replacing current climate disclosure rules with UK SRS S2 (and optional use of S1) but warned that proposed reliefs could weaken disclosure quality and comparability, undermining investor confidence. It emphasized that Scope 3 emissions—often the largest share of an organisation’s greenhouse gases—should be mandated within a reasonable timeframe and cautioned against delaying non-climate reporting that is financially material. The FCA will review responses and is due to set out guidance in 2026 ahead of rules expected to take effect from 1 January 2027. Market impact: stronger alignment could improve global comparability and investor trust, but diluted reliefs risk reducing transparency and complicating capital allocation decisions for investors in UK-listed firms and the UK index landscape.