Financial Conduct Authority Primary Market Bulletin No 66

We refer to the Financial Conduct Authority’s consultation GC26/6 (Primary Market Bulletin No. 66), published on 30 September 2026, on draft Technical Note 803.1 (TN 803.1), the proposed amendments to TN 801.4 and the proposed deletion of TN 802.3. We welcome the opportunity to contribute an investor perspective on how the “comply or explain” approach in Policy Statement PS26/19 should operate in practice.

Norges Bank Investment Management (NBIM) is the investment management division of the Norwegian Central Bank (Norges Bank) and is responsible for investing the Norwegian Government Pension Fund Global. NBIM is a globally diversified investor with approximately NOK 22,700 billion under management, or 1,724 billion GBP. Of these, about GBP 90 billion was invested in the United Kingdom at end June 2026.

As a long-term, global investor, we consider our returns over time to depend on sustainable development in economic, environmental and social terms, as well as on well-functioning, legitimate and efficient markets. We need consistent, comparable, reliable and decision-useful information from companies on sustainability-related risks and opportunities that are financially material to their business. We support the IFRS Sustainability Disclosure Standards (ISSB Standards) as the global baseline for such information, and we strongly support the UK’s adoption of UK SRS.

In our response to Consultation Paper 26/5, we recommended that the FCA keep climate-related disclosures under UK SRS S2 mandatory, make Scope 3 and UK SRS S1 reporting mandatory on a defined timeline, and avoid an open-ended “comply or explain” regime[1]. PS26/19 instead places all UK SRS disclosures on a “comply or explain” basis. We recognise that this policy decision has been taken and that this consultation concerns the accompanying guidance. We therefore focus our response on how the Technical Note can limit the risk that “comply or explain” results in incomplete and non-comparable disclosure.

The draft note sets out how to comply and what an explanation should contain, but it does not yet say when it is acceptable to explain. A “comply or explain” regime is not equivalent to a mandatory one. It can allow issuers to withhold material information, reduces comparability across companies and over time, and can produce explanations of variable quality. The effectiveness of the regime will depend on issuers choosing to comply, and on the FCA’s approach to its supervision. Our key messages are as follows:

State the regulatory intent. Technical Note 803.1 should say that the FCA expects issuers ordinarily to disclose in accordance with UK SRS, and that the option to explain is exceptional flexibility beyond the proportionality provisions and transition reliefs already in the standards.

Apply materiality and proportionality first. UK SRS already allows issuers to omit immaterial information, to use estimates, simpler data and qualitative disclosure, and to rely on “reasonable and supportable information available without undue cost or effort”. The Technical Note should clarify that existing provisions of UK SRS already address the scope of information to be disclosed and provide reliefs.

Limit explaining to exceptional and transitional circumstances. The note should state that explaining is available only where an issuer is unable, despite reasonable and proportionate efforts, to disclose in accordance with UK SRS, and that it is not available because an issuer prefers not to disclose, finds disclosure inconvenient, or has not put the necessary systems and processes in place. Explanations should give specific reasons, the steps being taken and indicate the timeline to compliance.

Refine the illustrative examples. Examples 2, 3 and 4 risk signalling that disclosure of financially material information is optional. We propose specific changes in the Annex.

Supervise and review. We encourage the FCA to monitor how issuers use the option to explain and to commit to a review, with a view to moving towards mandatory disclosure as market capacity increases. This would bring the UK market in line with several other capital markets which have already moved towards mandatory disclosure.

Our detailed responses to the consultation questions are set out in the Annex. We would welcome the opportunity to discuss our views with you.

Yours sincerely

Carine Smith Ihenacho
Chief Governance and Compliance Officer        

Elisa Cencig                   
Head of Policy Engagement 

[1] FCA Consultation Paper CP26/5: Aligning listed issuers' sustainability disclosures with international standards | Norges Bank Investment Management