Climate-related Financial Disclosures (CFD)

01 · The answer

Climate risk, told in the strategic report — because the law says so

Climate-related financial disclosures are eight statements a large UK company must put in its annual report, describing how climate change bears on the business and what the board is doing about it. They were made mandatory by the Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022 — SI 2022/31 — and by the parallel LLP instrument, SI 2022/46.

The obligation

Eight disclosures

Governance, risk identification, risk integration, principal risks and time horizons, business-model impact, scenario resilience, targets, and KPIs — section 414CB(2A).

Read all eight

The trigger

500 employees

Plus a second test that differs by route: traded, banking, insurance and AIM companies need only the headcount; everyone else also needs turnover above £500m.

Check your scope

What changed in 2026

No more duplication

Government has designated UK SRS S2 a national reporting framework — report under it and you need not repeat the CFD disclosures separately.

What the FRC said

Every figure and quotation on this page is linked to the instrument, regulator or review it comes from. Reference, not advice.

Why climate-related financial disclosures became UK law — climate demonstrators with a There Is No Planet B placard

Photo: Unsplash / Li-An Lim

02 · Disambiguation

“CFD” means three unrelated things in the UK

Search results for the abbreviation mix all three together, so it is worth saying plainly which one this page is about — and where to go if it is one of the others.

You are here CFD Climate-related financial disclosures

The Companies Act 2006 duty created by SI 2022/31 and SI 2022/46. Eight narrative disclosures in the annual report. Overseen by the FRC.

Dept for Business & Trade · FRC

CfD Contracts for Difference

The UK’s main support scheme for low-carbon electricity generation, run in periodic allocation rounds. A subsidy mechanism, not a reporting duty — note the lower-case “f”.

DESNZ · Low Carbon Contracts Company

CFDs Contracts for difference (trading)

Leveraged derivative products sold to retail investors and regulated by the FCA as financial instruments. No connection to climate reporting or to the energy scheme above.

FCA conduct regulation

Why this matters for reporting

Board papers and search results routinely conflate the first two. If a paper refers to “our CFD exposure” it is worth establishing whether the author means a disclosure obligation or a generation contract before anyone drafts anything.

CFD scope thresholds — an Only Leave Your Footprints sign on a beach, marking the 500-employee and £500m turnover tests

Photo: Unsplash / Nick Fewings

03 · Scope

Three routes in — and every one of them starts at 500 employees

There is no single CFD test. The Regulations create three separate gateways, and which one catches you decides whether turnover matters at all.

CFD scope threshold — more than 500 employees on every route into the Companies Act climate-related financial disclosure regime — Every route in starts at the same headcount. Source: SI 2022/31.

Regulation 3 of SI 2022/31 works by adding categories to section 414CA of the Companies Act 2006. The headcount test — more than 500 employees — is common to all three routes. The turnover test applies to one of them only. For a parent, both tests are applied to the group on an aggregated basis, and where a financial year is not in fact a year the £500m figure is adjusted proportionately.

CFD scope checkerSI 2022/31 reg 3 · SI 2022/46

The checker applies the statutory tests to what you enter and shows the route that catches you. It is a reading aid, not advice — entities near a threshold, and groups with unusual structures, should take proper advice.

Companies — SI 2022/31

Three routes

1Traded, banking, authorised insurance companies and companies carrying on insurance business, listed in s414CA(1) — more than 500 employees. No turnover test.

2AIM companies — securities admitted to trading on the Alternative Investment Market, more than 500 employees. No turnover test.

3“High turnover companies” — not caught by another category, more than 500 employees and turnover above £500m. This is the route that catches large private companies.

LLPs — SI 2022/46

Two routes

1Traded or banking LLPs with more than 500 employees.

2“Large LLPs” — more than 500 employees and turnover above £500m.

!The instrument’s “large LLP” is a bespoke definition for this purpose. It is not the ordinary Companies Act size test (£36m / £18m / 250 employees) and the two should never be conflated.

The deliberate design

Route 3 is the point of the whole instrument. The FCA’s listing rules reach listed issuers; nothing reached a private company with 4,000 staff and £2bn of turnover. CFD does. If you are reading this because a large private group has just crossed a threshold, that is the route you are in — and the FRC has reviewed exactly this cohort.

04 · The requirement

The eight disclosures, in the words of the statute

Regulation 4 inserts subsection (2A) into section 414CB of the Companies Act 2006 and defines “climate-related financial disclosures” as eight items, lettered (a) to (h). Each is quoted below exactly as enacted, with what it asks for in practice and what the FRC looked for when it reviewed the first reporting cycle.

Climate-related financial disclosures — the eight disclosures required by section 414CB(2A) of the Companies Act 2006 — Eight lettered items, (a) to (h). Source: Companies Act 2006, s.414CB.

Grouping the eight by TCFD pillar is our mapping, offered because it is how most boards already think. The statute itself does not label them by pillar — it simply lists eight things.

a TCFD pillar · Governance No omission gate

Governance arrangements

“a description of the company’s governance arrangements in relation to assessing and managing climate-related risks and opportunities” Companies Act 2006, s414CB(2A)(a)

Who owns climate risk, and through what machinery. In practice: the board’s oversight role, which committee holds the file, how often it is discussed, and where management responsibility actually sits below board level.

What the FRC found: most companies disclosed something, but quality varied sharply. The regulator asked for climate oversight to be embedded in the governance framework with board and management responsibilities clearly defined and tied to strategy — not a paragraph asserting that the board takes climate seriously.

Board oversightCommittee remitManagement ownershipFrequency

What a complete (a) traces

BoardRetains oversight; climate a standing item

CommitteeAudit or ESG committee holds the file

ExecutiveNamed director accountable

FunctionRisk, finance and operations deliver

The FRC’s point about governance is that the chain should be visible end to end. A disclosure that stops at “the board oversees climate risk” describes an intention, not an arrangement.

b TCFD pillar · Risk management No omission gate

How you identify, assess and manage

“a description of how the company identifies, assesses, and manages climate-related risks and opportunities” Companies Act 2006, s414CB(2A)(b)

The process itself, described so a reader could follow it: how candidate risks are surfaced, what makes one material, who scores them, and what happens next. Note that opportunities are named in the statute alongside risks — a risk-only disclosure is incomplete on the face of it.

What the FRC found: generic process descriptions were common. The regulator wanted entity-specific explanation of how climate risk is actually assessed and mitigated in that business, covering both sides of the risk/opportunity pairing.

IdentificationAssessmentMitigationOpportunities too

The four moves (b) has to show

1How a climate risk gets on the register

2The test that makes it principal

3Who scores it, and against what

4The mitigation actually taken

Four moves, described for your business rather than in the abstract. This is the disclosure that most often reads as boilerplate.

c TCFD pillar · Risk management No omission gate

Integration into overall risk management

“a description of how processes for identifying, assessing, and managing climate-related risks are integrated into the company’s overall risk management process” Companies Act 2006, s414CB(2A)(c)

Not the climate process again — the join. Does climate risk run through the same register, the same scoring scale and the same escalation route as everything else, or does it live in a parallel sustainability workstream that never meets the principal risks table?

What the FRC found: the interaction between climate risks and the company’s own principal risks and uncertainties was singled out as an area for improvement. Where the two disclosures disagree, a reader notices.

One registerSame scoringEscalationConsistency with PRU

Integrated, not parallel

ClimatePhysical and transition risks identified

RegisterEntered on the group risk register

ScoredSame likelihood/impact scale as all risk

PRUSurfaces in principal risks & uncertainties

If a climate risk is principal, it should appear in the principal risks table. That is the test (c) is really asking you to pass.

d TCFD pillar · Strategy No omission gate

Principal risks, opportunities and time horizons

“a description of— (i) the principal climate-related risks and opportunities arising in connection with the company’s operations, and (ii) the time periods by reference to which those risks and opportunities are assessed” Companies Act 2006, s414CB(2A)(d)

The substance, plus the clock. Limb (ii) is frequently skipped: you must say over what time periods you assessed — and “short, medium and long term” means nothing until each is given a number of years and a reason for that number.

What the FRC found: time horizons were often asserted without explanation of why they suit that business, and risks were described without the matching opportunities.

Physical riskTransition riskOpportunitiesDefined horizons

Limb (ii) — the part that gets dropped

SShort terme.g. to 2029

MMedium terme.g. to 2035

LLong terme.g. to 2050

?Why these periodsasset life, contracts

Illustrative horizons only. The statute does not prescribe periods — it requires you to state the ones you used, which implies a reason for choosing them.

e TCFD pillar · Strategy Omission gate applies

Impact on business model and strategy

“a description of the actual and potential impacts of the principal climate-related risks and opportunities on the company’s business model and strategy” Companies Act 2006, s414CB(2A)(e)

Where the risks identified in (d) actually bite: which products, sites, contracts, input costs or customer segments change, and what the company is doing differently as a result. “Actual and potential” means today’s effects as well as the modelled ones.

What the FRC found: the weakest link in most reports was between climate and strategy. The regulator asked companies to tie risks and opportunities directly to strategy and operational change, and to be explicit about the financial and strategic consequences.

Actual impactsPotential impactsBusiness modelStrategy change

Where the impact lands

Input and energy costsTransition

Asset and site exposurePhysical

Customer demand shiftBoth

Capital & insurance termsTransition

Illustrative channels, not a benchmark — the bars show the shape of the question, which is which parts of the model move and by how much, in your own figures.

f TCFD pillar · Strategy Omission gate applies

Scenario resilience

“an analysis of the resilience of the company’s business model and strategy, taking into consideration different climate-related scenarios” Companies Act 2006, s414CB(2A)(f)

The hardest of the eight, and the one most often thin. The statute says “different” scenarios — plural — and asks for an analysis, not a statement that the business is resilient. It does not prescribe a temperature pathway, a provider or a quantification method.

What the FRC found: in many reports scenario analysis was simply absent, and where present it often lacked stated assumptions. The regulator asked for quantitative analysis with clear assumptions and stated financial implications, across multiple scenarios.

Multiple scenariosStated assumptionsFinancial implicationsResilience conclusion

Why one line is not an analysis

Orderly transition Delayed transition High physical risk

Illustrative shape only — no scenario data. The point (f) makes is that the divergence between pathways, and what it does to the business, is the disclosure. A single central case cannot answer it.

g TCFD pillar · Metrics & targets Omission gate applies

Targets, and performance against them

“a description of the targets used by the company to manage climate-related risks and to realise climate-related opportunities and of performance against those targets” Companies Act 2006, s414CB(2A)(g)

Two halves, and the second is the one that gets left out. Setting a 2050 net-zero ambition satisfies none of (g) on its own: the statute asks for performance against the targets, which requires a baseline, an interim marker and this year’s position against it.

What the FRC found: the review specifically examined the interaction between SECR figures and climate targets and KPIs — the emissions numbers you already publish should reconcile with the targets you claim to be managing to.

Baseline yearInterim targetThis year’s positionReconciles to SECR

What “performance against” requires

Baseline year statedrequired

Target with a daterequired

Interim markerexpected

Position this yearrequired

“Required” here means required to answer (g) as written; “expected” reflects what the FRC looked for rather than the words of the statute.

h TCFD pillar · Metrics & targets Omission gate applies

KPIs — and the calculations behind them

“a description of the key performance indicators used to assess progress against targets used to manage climate-related risks and realise climate-related opportunities and of the calculations on which those key performance indicators are based” Companies Act 2006, s414CB(2A)(h)

The final clause is the demanding one: not just the indicator, but the calculation on which it is based. Boundary, method, emission factor set, restatement policy. This is the disclosure that turns a climate section into something a reader can check.

Practical note: most in-scope companies are already computing Scope 1, Scope 2 and business-travel Scope 3 for SECR. Those figures and their stated methodology are the natural spine of (h) — and where the two disagree, someone will ask why.

Indicator definitionBoundaryMethod & factorsRestatements

What a checkable KPI carries

✓The number itselftCO₂e

✓Organisational boundarycontrol basis

✓Factor set and yearstated

✓Restatement policywhen & why

The statute’s words are “the calculations on which those key performance indicators are based”. A bare number does not meet them.

05 · The gate

Four of the eight may be left out — four may not

This is the most consistently misreported feature of the regime. CFD is widely described as “comply or explain”. It is not, or at least not uniformly: the escape hatch inserted by regulation 4 reaches only paragraphs (e), (f), (g) and (h).

CFD omission gate — only paragraphs (e) to (h) of section 414CB(2A) may be omitted, and only with a clear and reasoned explanation — Four of the eight may be left out. Four may not. Source: Companies Act 2006, s.414CB(2B).

Unqualified — must be given

s414CB(2A)(a)–(d)

aGovernance arrangements

bHow you identify, assess and manage

cIntegration into overall risk management

dPrincipal risks, opportunities and time horizons

No materiality filter, no directors’ belief test, no explanation route. If you are in scope, these four are simply required.

Omissible — with a reasoned explanation

s414CB(4A)–(4B)

eImpact on business model and strategy

fScenario resilience

gTargets and performance

hKPIs and their calculations

And only where the directors reasonably believe, having regard to the nature of the business and the manner in which it is carried on, that the disclosure is not necessary for an understanding of the business.

“…reasonably believe that, having regard to the nature of the company’s business, and the manner in which it is carried on, the whole or a part of a climate-related financial disclosure required by subsection (2A)(e), (f), (g) or (h) is not necessary for an understanding of the company’s business” — and where they do, the statement “must provide a clear and reasoned explanation of the directors’ reasonable belief”. Companies Act 2006, s414CB(4A) and (4B), as inserted by SI 2022/31 reg 4

Three things directors should notice

It is partial. The gate reaches “the whole or a part” of a disclosure — you can omit an element of (f) rather than all of it. It is a directors’ belief, on the record. The test is what the directors reasonably believe about this business, so a generic explanation is weak evidence of a reasonable belief. And the explanation is itself a disclosure. “Clear and reasoned” is a standard; silence is not an option, and neither is a single sentence that could have been written for any company in the country.

Where CFD disclosures sit — a tree growing through corporate concrete architecture, the strategic report of a large UK company

Photo: Unsplash / Alexander Abero

06 · Location

Not just “the annual report” — a named statement inside it

Regulation 2 renamed the existing non-financial information statement. It is now the Non-Financial and Sustainability Information Statement, and the new s414CB(A1) says that statement “must contain the climate-related financial disclosures of the company”.

Companies

The NFSIS, within the strategic report. The strategic report is approved by the board and signed on its behalf, so a defective CFD carries the same consequences as any other defective strategic-report content.

Traded & banking LLPs

The strategic report, on the same footing as companies.

Other in-scope LLPs

The energy and carbon report within the members’ report — a different home, under SI 2022/46. Worth checking before drafting: the two instruments do not put the disclosures in the same place.

Parent companies

Thresholds are tested on the aggregated group. A parent presenting company-only accounts was one of the specific situations the FRC addressed in its review.

Why the renaming matters

“Non-financial and sustainability information statement” is now a term of art with content requirements in s414CB(1)–(5). It is also the hook the Government used in 2026 to remove duplication for UK SRS reporters — the designation only works because the NFSIS exists.

CFD vs TCFD — wind turbines above a flowering rapeseed field, the statutory regime against the voluntary framework

Photo: Unsplash / Zbynek Burival

07 · The comparison people actually search for

CFD vs TCFD: one is a law, the other was a framework

They look alike because one was built from the other. They are not interchangeable, and being compliant with one does not settle the other.

TCFD

The Task Force on Climate-related Financial Disclosures, created by the Financial Stability Board in December 2015, with its Final Report in June 2017. Four pillars, eleven recommended disclosures. Voluntary in itself — it had no legal force anywhere. The Task Force was disbanded in 2023 and its monitoring work passed to the ISSB. Full history on our TCFD page.

CFD

UK company law. Eight disclosures shaped by the TCFD architecture but written into the Companies Act 2006, enforceable through the strategic-report regime, and catching entities TCFD never reached because a voluntary framework reaches nobody by force.

Eleven TCFD recommended disclosuresEight CFD paragraphs

The eight are not a subset of the eleven — they are a re-drafting. Mapping between them is a drafting exercise, not arithmetic, which is why the number changes.

What is genuinely the same

Shared architecture

•The four-pillar shape: governance, strategy, risk management, metrics and targets.

•The insistence on scenario analysis as the test of strategic resilience.

•Risks and opportunities, not risks alone.

What is different, and matters

Legal effect

1Force. CFD is a statutory duty; TCFD was a recommendation that required an adopting instrument to bind anyone.

2Scope. CFD reaches large private companies and LLPs. The FCA’s TCFD-aligned rules reach listed issuers only.

3Flexibility. The FCA rules are comply-or-explain across the board; CFD is unqualified for (a)–(d) and gated only for (e)–(h).

4Status. TCFD no longer exists as a body. CFD is current law.

A company can be caught by CFD, by the FCA’s rules, or by both at once — and the government’s own non-binding guidance for companies and LLPs confirms that disclosures made under the Listing Rules should also comply with the Regulations. Which instrument catches whom is set out on TCFD UK requirements.

08 · The other UK rulebook

The FCA’s TCFD-aligned listing rules — and their proposed deletion

Listed issuers have been making TCFD-aligned disclosures under the UK Listing Rules on a comply-or-explain basis, separately from the Companies Act duty. Those rules are the ones due to disappear.

Today

UKLR 6.6.6R(8) requires issuers of equity shares in commercial companies to include a TCFD-aligned statement in the annual financial report, with parallel provisions for other UKLR categories. The FCA maintains a technical note — TN/802.3, January 2026 — on how it expects those disclosures to be made.

Proposed

CP26/5, published 30 January 2026, proposes deleting the TCFD-aligned rules and requiring UK SRS S2 instead, for accounting periods beginning on or after 1 January 2027. The consultation closed on 20 March 2026 and the Policy Statement is expected in autumn 2026.

The split nobody mentions

CP26/5 does not treat the five in-scope UKLR categories alike. UKLR 6, 16 and 22 would take mandatory UK SRS S2 in full. UKLR 14 and 15 — secondary listings and depositary receipts — would instead give a statement of what climate or sustainability disclosures they make in their primary overseas venue, or that they make none: no UK SRS obligation at all. Writing “five categories in scope” without that split misstates the proposal.

What this does and does not do to CFD

Nothing in CP26/5 touches the Companies Act. The FCA writes listing rules; it cannot amend s414CB. A listed company that is also over the CFD thresholds stays in CFD scope after the listing rules change — but see the next section, because the duplication problem has been dealt with a different way.

09 · The 2026 change

UK SRS S2 is now a designated national reporting framework — and that removes the duplication

This is the single most important development for CFD reporters since the regime began, and it is not yet widely reflected in guidance. The obligation was not repealed. The requirement to write it out twice was.

“The Government has confirmed that UK SRS S2 is a national reporting framework and that it will not be necessary for UK entities to duplicate climate-related financial disclosure requirements, under section 414CB(2A) of the Companies Act 2006, so long as use of UK SRS S2 is clearly referenced in the NFSIS, and existing NFSIS requirements relating to climate-related financial disclosures set out in section 414CB (1)-(5) of the Companies Act 2006 are met. This applies regardless of whether UK SRS is applied on a mandatory or voluntary basis.” FRC, Sustainability Reporting Developments: Frequently Asked Questions — read 12 August 2026

Read carefully, that sentence carries four conditions and one very large consequence.

The designation is under s414CB(2A) itself

Government has designated UK SRS S2 as a national reporting framework for the purpose of the climate-related financial disclosures. That is the mechanism — not an amendment, not a repeal.

Use of UK SRS S2 must be clearly referenced in the NFSIS

The statement has to say what it is doing. A UK SRS S2 report sitting elsewhere in the annual report, unmentioned in the NFSIS, does not obviously engage the designation.

s414CB(1)–(5) must still be met

The rest of the NFSIS content requirements are unaffected. The relief is from duplicating the climate disclosures, not from the statement itself.

It applies to voluntary adopters too

Explicitly — “regardless of whether UK SRS is applied on a mandatory or voluntary basis”. Any UK entity has been able to adopt UK SRS voluntarily since the standards were published on 25 February 2026.

The practical consequence

A large private company in CFD scope that adopts UK SRS S2 voluntarily now writes one climate report, not two. Given that the same company is a plausible candidate for the Modernising Corporate Reporting extension to economically significant private companies — consultation expected during 2026, not yet opened — early voluntary adoption starts to look less like keenness and more like sequencing. Our UK SRS thresholds page tracks who is caught now and who may be next.

The Government has also said it intends to update the guidance on climate-related financial disclosures for companies and LLPs to reflect this. As at 12 August 2026 the published guidance still predates the designation — worth knowing if you are working from it.

CFD metrics and emissions data — a single leaf held in an open hand, the measured numbers behind a climate disclosure

Photo: Unsplash / @name_ gravity

10 · The other numbers

CFD, SECR and the Scope 3 question

CFD is narrative. SECR is numeric. They sit in different parts of the annual report, catch overlapping but different populations, and are frequently confused with one another.

SECR

Streamlined Energy and Carbon Reporting: energy use and greenhouse gas emissions, in the directors’ report (or the energy and carbon report for LLPs). Quoted companies report Scope 1 and Scope 2 globally; large unquoted companies and LLPs report UK energy, Scope 1 and 2, and Scope 3 from business travel in employee-owned vehicles — plus at least one intensity ratio. Full detail on the SECR reporting guide.

CFD

Narrative climate disclosures in the NFSIS in the strategic report. It does not prescribe Scope 1, 2 or 3 at all. Paragraph (h) asks for the KPIs you use and their calculations — which for most companies means the SECR figures, but that is a consequence of how you chose your KPIs, not a statutory instruction.

Scope 3, precisely

Full Scope 3 is a UK SRS S2 requirement, not a CFD one and not a general SECR one. Under CP26/5 the Scope 3 obligation for in-scope listed companies would begin for accounting periods beginning on or after 1 January 2028 after a one-year relief. If you are searching “TCFD Scope 3” and you are a CFD reporter, the honest answer is that your statutory duty does not name Scope 3 — see Scope 3 reporting for what will.

Where the FRC looked

The review examined the interaction between SECR and climate targets and KPIs specifically. Two sets of emissions numbers in one annual report that do not reconcile is the sort of thing corporate reporting review notices, and it costs nothing to check before filing.

11 · The instrument

The Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022

SI 2022/31 is short — five regulations across three parts — and it works entirely by amending the Companies Act 2006. Reading it directly takes about ten minutes and settles most arguments.

CFD statutory review — the Secretary of State must publish a review report on the Regulations before 6 April 2027 — The review the instrument sets on itself. Source: SI 2022/31, reg 5.

Provision	What it does	Effect on the annual report
Reg 1	Citation and commencement	In force 6 April 2022; applies to any financial year commencing on or after that date
Reg 2	Amends s414C(2)	Inserts “and sustainability” — the statement becomes the NFSIS
Reg 3	Amends s414CA	Adds AIM companies and “high turnover companies” to the categories that must produce the statement
Reg 4	Amends s414CB	Inserts (A1) — the statement must contain the CFD; (2A) — the eight disclosures; (4A)–(4B) — the omission gate for (e)–(h); (10) — power to issue guidance
Reg 5	Review	The Secretary of State must publish a review report before 6 April 2027, then at intervals of not more than five years

Scroll the table sideways →

Read the instrument itself at legislation.gov.uk, the LLP version at SI 2022/46, and the amended section itself at Companies Act 2006 s414CB. HM Treasury also published Q&A guidance on the Regulations in 2022. Where the instrument sits in the wider statute book is mapped on UK SRS legislation.

One drafting point worth knowing

SI 2022/31 genuinely says “financial year”, while the FCA frames its own requirements in terms of accounting periods. Both are correct in their own instrument. Do not “correct” the Regulations to match the FCA’s language when quoting them.

12 · At a glance

Five UK climate-reporting regimes, side by side

The single most common source of confusion in this area is treating these as one thing. They are five instruments with five populations.

	CFD	FCA listing rules (TCFD-aligned)	UK SRS S2	SECR	ESOS
Instrument	SI 2022/31 & 2022/46, Companies Act 2006	UK Listing Rules, e.g. UKLR 6.6.6R(8)	Standard published by DBT, 25 Feb 2026	SI 2018/1155, Companies Act 2006	SI 2014/1643 as amended
Who	>500 employees: traded, banking, insurance, AIM; or >500 and >£500m turnover	Listed issuers in the relevant UKLR categories	Voluntary for anyone now; proposed mandatory for UKLR 6, 16, 22	Quoted companies; large unquoted companies and LLPs	Large undertakings meeting the ESOS qualification test
Status	In force since 6 Apr 2022	In force — deletion proposed	Voluntary; mandatory proposed 1 Jan 2027	In force	In force
Where it goes	NFSIS in the strategic report (LLPs: energy and carbon report)	Annual financial report	General purpose financial reports, alongside the accounts	Directors’ report	Notification to the Environment Agency
Flexibility	(a)–(d) unqualified; (e)–(h) omissible with a reasoned explanation	Comply or explain throughout	Mandatory as proposed, with transitional reliefs	Prescribed content; limited exemptions	Audit obligation, not a disclosure
Emissions figures	Not prescribed — (h) asks for your own KPIs and calculations	Per TCFD recommendations	Scope 1, 2 and 3 per GHG Protocol	Scope 1, 2 and limited Scope 3	Energy audit, not emissions
Read more	This page	TCFD UK requirements	UK SRS S2	SECR guide	ESOS

Scroll the table sideways →

Every “proposed” entry depends on the FCA Policy Statement, which had not published as at 12 August 2026. Nothing in the UK SRS S2 column is settled law.

UK climate disclosure deadlines — wind turbines at dawn over farmland, the CFD and UK SRS reporting timeline

Photo: Unsplash / Zac Wolff

13 · Dates

Every date that bears on a CFD reporter

Law in green, proposals in amber. Nothing dated 2027 onwards is settled — the FCA Policy Statement had not published when this page was last updated.

17 January 2022

SI 2022/31 madeLaw

The Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022 are made. SI 2022/46 follows for LLPs.

6 April 2022

CFD comes into forceLaw

Applies to any financial year commencing on or after this date. First reports land in 2023.

21 January 2025

FRC thematic review publishedRegulator

First review of CFD reporting by AIM and large private companies, after the first mandatory cycle.

21 October 2025

Modernisation of Corporate Reporting confirmedProgramme

Written Ministerial Statement sets the direction, including a future extension of UK SRS to economically significant private companies.

30 January 2026

FCA CP26/5 publishedProposal

Proposes deleting the TCFD-aligned listing rules and requiring UK SRS S2 for UKLR 6, 16 and 22 from 1 January 2027.

25 February 2026

Final UK SRS S1 and S2 publishedStandards

DBT publishes the final standards for voluntary use, with six UK-specific amendments, after 209 consultation responses.

c. 26 February 2026

UK SRS S2 designated a national frameworkLaw effect

FRC FAQ confirms UK SRS S2 reporters need not duplicate the s414CB(2A) disclosures, mandatory or voluntary.

20 March 2026

CP26/5 consultation closesProposal

Seven-week consultation ends. Policy Statement expected autumn 2026.

Autumn 2026 · expected

FCA Policy StatementExpected

Confirms or changes the final listing-rule position. Until it publishes, every 2027 date below is a proposal.

1 January 2027 · proposed

UK SRS S2 mandatory for in-scope listed companiesProposed

Accounting periods beginning on or after this date, for UKLR 6, 16 and 22. CFD continues unchanged for everyone else.

Before 6 April 2027

Statutory review of the CFD RegulationsLaw

Regulation 5 requires the Secretary of State to publish a review report before this date, then at intervals of not more than five years. This is the date on which the CFD regime itself is formally reconsidered.

1 January 2028 · proposed

Scope 3 relief endsProposed

Scope 3 emissions for in-scope listed companies, after a one-year deferral. UK SRS S1 non-climate follows for periods beginning on or after 1 January 2029.

Your CFD datesEnter your year end

CFD governance arrangements — a living green facade on a corporate building, board oversight of climate risk

Photo: Unsplash / Ricardo Gomez Angel

14 · Consequences

Who checks, and what they found the first time

CFD has no bespoke penalty regime. It does not need one: the disclosures sit in the strategic report, directors approve the strategic report, and the FRC reviews strategic reports.

The FRC published its Thematic Review of Climate-related Financial Disclosures by AIM and Large Private Companies on 21 January 2025, after the first mandatory reporting cycle. It is the closest thing to a marking scheme this regime has, and it was written for exactly the cohort route 3 catches.

The overall verdict: inconsistent quality

Preparers had “endeavoured to meet the CFD requirements”, but quality varied and areas for improvement were identified for most companies reviewed.

Scenario analysis was the biggest gap

In many reports it was absent altogether. Where present, assumptions frequently went unstated. The FRC asked for quantitative analysis, clear assumptions and stated financial implications.

Length is not the answer

On average around a quarter of the strategic reports reviewed was given over to CFD. The FRC’s response was not to ask for more, but for the 4Cs: company-specific; clear, concise and understandable; clutter-free and relevant; comparable.

Boilerplate is the recurring failure

Across governance, risk management and strategy, the same criticism recurs: the disclosure described a generic process rather than this company’s. Entity-specific detail is what the regulator is asking for.

The route by which it bites

The strategic report is approved by the board and signed on its behalf under s414D. The FRC reviews corporate reporting and can require explanation and, ultimately, restatement. Separately, disclosures made under UK SRS within the strategic report attract the s463 liability protection that applies to strategic-report content generally — a point in favour of putting climate reporting in the statutory statement rather than in a standalone document.

CFD targets and key performance indicators — hands holding a seedling in soil, measuring progress against climate targets

Photo: Unsplash / Nikola Jovanović

15 · By company type

Where the eight land differently

The statute is the same for everyone in scope. What changes is which disclosures do the work, and which are candidates for the (e)–(h) gate.

Route 3

Large private groups

The cohort the FRC reviewed and the cohort MCR Strand 2 may reach next. No listing-rule history to build on, so (a) and (c) usually need building from scratch. Voluntary UK SRS S2 adoption now removes future duplication.

Route 2

AIM companies

Caught on headcount alone, with no turnover test. Often smaller finance functions than the obligation assumes. The FRC review covers AIM explicitly — it is the closest thing to sector guidance available.

Route 1

Banking & insurance

Financed and underwritten emissions dominate, so (d) and (e) are where the analysis lives. Also the population most likely to be doing scenario work already for prudential purposes — (f) should be the easiest of the eight here, not the hardest.

Route 1

Listed commercial companies

Two rulebooks at once today, and the one that changes is the FCA’s. Plan on the assumption that CFD survives the listing-rule replacement, with duplication handled by the UK SRS S2 designation rather than by repeal.

Asset-heavy

Manufacturing, real estate, logistics

Physical risk is site-specific and quantifiable, which makes (f) genuinely answerable — and makes an unquantified answer conspicuous. Asset lives should be driving the (d)(ii) time horizons.

LLPs

Professional partnerships

Different instrument, different home in the report, and a bespoke “large LLP” definition. Low direct emissions usually make (h) straightforward while (e) is the one that requires real thought.

16 · The short version

Five things to take away

It is law

Not a framework, not guidance. Section 414CB(2A) of the Companies Act 2006, in force since 6 April 2022.

Eight, not eleven

CFD has eight paragraphs; TCFD had eleven recommended disclosures. Shared architecture, different drafting.

Half are unqualified

(a) to (d) must be given. Only (e) to (h) can be omitted, and only with a clear and reasoned explanation.

No duplication

Report under UK SRS S2, reference it in the NFSIS, and you need not write the CFD disclosures out again.

6 April 2027

The statutory review report on the Regulations is due before then. That is when the regime itself gets reconsidered.

Climate risk disclosure for UK companies — hands cupping a fern frond above woodland floor

Photo: Unsplash / Noah Buscher

17 · Before you sign

Ten questions a director should be able to answer

Drawn from the statutory wording and from what the FRC actually criticised. Tick what you can evidence; what is left is your drafting list.

CFD board checklist10 questions

18 · FAQ

CFD — frequently asked questions

What are climate-related financial disclosures (CFD)?

Climate-related financial disclosures (CFD) are a statutory reporting requirement under the Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022, with a parallel instrument for LLPs. In-scope companies must include eight climate disclosures — covering governance, risk management, strategy, scenario resilience, and metrics and targets — in the strategic report, for accounting periods beginning on or after 6 April 2022. The structure follows the TCFD framework, but CFD is a Companies Act legal requirement, not a voluntary framework.

Who must comply with CFD?

CFD applies to UK companies with more than 500 employees that are traded, banking or insurance companies (and AIM companies over the threshold), and to other UK-registered companies and LLPs with more than 500 employees and more than £500m annual turnover. This deliberately captures large private companies that were never covered by the FCA’s TCFD-aligned Listing Rules.

How is CFD different from TCFD?

TCFD is the (now-disbanded) global framework that defined the four-pillar architecture for climate reporting. CFD is UK law that hard-codes eight TCFD-shaped disclosures into the Companies Act strategic report. A company can be caught by CFD, by the FCA’s listing-rule requirements, or both — the content overlaps heavily but the legal instruments, scope tests and enforcement routes differ.

Does UK SRS replace CFD?

No — but as of 2026 you no longer have to report both separately. The Companies Act CFD requirement is unrepealed and continues to apply. What changed is that the Government has designated UK SRS S2 as a national reporting framework for the purposes of section 414CB(2A), and the FRC has confirmed that entities using UK SRS S2 need not duplicate the climate-related financial disclosures — provided use of UK SRS S2 is clearly referenced in the non-financial and sustainability information statement, and the section 414CB(1)–(5) requirements are still met. This applies whether UK SRS S2 is applied on a mandatory or a voluntary basis. Separately, the FCA’s CP26/5 proposals would replace the TCFD-aligned Listing Rules with UK SRS S2 for in-scope listed companies from 2027, subject to a Policy Statement expected in autumn 2026.

Where do CFD disclosures go, and who enforces them?

CFD disclosures sit in the strategic report (for LLPs, the energy and carbon report). They form part of the annual report filed at Companies House, and the FRC reviews compliance through its corporate reporting review function — CFD has featured in FRC thematic reviews of climate reporting. Directors approve the strategic report, so defective disclosure carries the same consequences as other strategic-report failures.

Is CFD comply-or-explain?

Only partly, and this is widely misreported. Paragraphs (a) to (d) of section 414CB(2A) — governance, how you identify and manage climate risk, how that process integrates with overall risk management, and your principal risks, opportunities and time horizons — are unqualified requirements with no explanation route. Paragraphs (e) to (h) may be omitted in whole or in part, but only where the directors reasonably believe, having regard to the nature of the business and the manner in which it is carried on, that the disclosure is not necessary for an understanding of the business — and the statement must then give a clear and reasoned explanation of that belief.

Does CFD require Scope 1, 2 and 3 emissions?

No. The CFD Regulations do not prescribe any emissions scope. Paragraph (h) requires a description of the key performance indicators used to assess progress against your climate targets and of the calculations behind them, which in practice means most companies use their existing SECR figures — but that is a consequence of the KPIs they chose, not a statutory instruction. Scope 1 and Scope 2 (plus limited Scope 3 from business travel) are SECR requirements; full Scope 3 across all fifteen categories is a UK SRS S2 requirement, proposed for in-scope listed companies for accounting periods beginning on or after 1 January 2028.

Does CFD require quantitative scenario analysis?

The statute asks for “an analysis of the resilience of the company’s business model and strategy, taking into consideration different climate-related scenarios”. It does not prescribe a temperature pathway, a scenario provider, or quantification. However, the FRC’s January 2025 thematic review found scenario analysis was frequently absent or unsupported by stated assumptions, and asked companies to conduct quantitative analysis with clear assumptions and stated financial implications across multiple scenarios. Note also that (f) is one of the four paragraphs the omission gate can reach — but omitting it requires a clear and reasoned explanation, not silence.

When will the CFD Regulations themselves be reviewed?

Regulation 5 of SI 2022/31 requires the Secretary of State to carry out a review of the Regulations and publish a report setting out the conclusions. The first report must be published before 6 April 2027, with subsequent reports at intervals of not more than five years. Separately, the Government’s Modernisation of Corporate Reporting programme — confirmed by Written Ministerial Statement on 21 October 2025 — is expected to consult during 2026 on extending UK SRS reporting to economically significant private companies through Companies Act amendments. As at August 2026 that consultation had not opened.

Is “CFD” the same as a Contract for Difference?

No — three unrelated things share the abbreviation in the UK. CFD in this sense means climate-related financial disclosures under the Companies Act 2006. CfD, with a lower-case “f”, means Contracts for Difference, the UK government’s support scheme for low-carbon electricity generation run through periodic allocation rounds. CFDs also refers to contracts for difference as leveraged retail trading products regulated by the FCA as financial instruments. Only the first is a corporate reporting obligation.

19 · Primary sources

Everything on this page, traced to where it came from

Each source below was read on 12 August 2026. Where a claim rests on a secondary report of a primary document, the page says so in the text.

The Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022 (SI 2022/31)

legislation.gov.uk · 2022

The Limited Liability Partnerships (Climate-related Financial Disclosure) Regulations 2022 (SI 2022/46)

legislation.gov.uk · 2022

Companies Act 2006, section 414CB — contents of the non-financial and sustainability information statement

legislation.gov.uk

GOV.UK / DBT · 2022

HM Treasury · 2022

Sustainability Reporting Developments: Frequently Asked Questions — the UK SRS S2 national-framework designation

FRC · read 12 Aug 2026

FRC reviews Climate-related Financial Disclosures (CFD) by AIM and large private companies

FRC · 21 January 2025

CP26/5 — Aligning listed issuers’ sustainability disclosures with international standards

FCA · 30 January 2026

UK Sustainability Reporting Standards — final UK SRS S1 and S2, published 25 February 2026

GOV.UK / DBT

Technical Note TN/802.3 — TCFD-aligned climate-related disclosure requirements for listed companies

FCA · January 2026

FRC review benchmarks climate-related financial disclosures

ICAEW · 29 January 2025

ESG and Climate — FRC corporate reporting review resources and thematic reviews

FRC

20 · Where to go next

Related guides and references

Framework