UK regulator drops mandatory climate-reporting plan for listed companies

Traders Union
All News
Financial News
UK drops mandatory climate-reporting

Highlights

The Financial Conduct Authority abandoned its proposed mandatory climate-reporting standard for listed companies, retaining the existing 'comply or explain' framework announced Wednesday.
Industry groups cited compliance costs and UK competitiveness concerns, while the Quoted Companies Alliance welcomed increased flexibility and proportionality in the revised rules.
A review found 92% of FTSE 350 companies disclosed climate risks in 2025 annual reports, as the UK joins the EU and U.S. in reassessing climate-reporting requirements.

Revised disclosure approach for listed groups

As reported by Reuters, the Financial Conduct Authority said in final rules published on Wednesday that it will retain the existing "comply or explain" framework for climate-related disclosures. Under that approach, listed companies can opt not to publish climate information if they explain their reasons.

The regulator had proposed in January requiring listed companies to use a new UK climate-reporting standard covering material climate-related risks and opportunities, climate targets and the potential impact of climate change on their business. The reversal places the FCA among regulators that are stepping back from tougher climate-disclosure requirements.

Companies responding to the consultation had raised concerns about the cost of compliance and the effect stricter rules could have on the UK's competitiveness as a listing venue. The Quoted Companies Alliance, which represents listed companies in the UK, said it welcomed measures that bring greater flexibility and proportionality.

Implications for investors and the UK market

Ian Bhullar, director for sustainability policy at UK Finance, said the change will help reduce reporting burdens but may also limit the information available to lenders and investors assessing sustainability risks and strategies. Carmen Nuzzo, executive director of the TPI Global Climate Transition Centre at the London School of Economics and Political Science, said it remains unclear whether voluntary compliance will hold up over time and whether climate data will become harder to compare.

The FCA first introduced climate-risk disclosure rules in 2020 for premium-listed companies, requiring them to report in line with a global framework or explain why they had not done so. Those rules were later extended to other listed companies, and the regulator said a review of FTSE 350 companies' 2025 annual reports found that 92% chose to disclose climate risks.

The UK decision comes as policymakers in other major economies also reassess climate-reporting burdens. The European Union has watered down parts of its disclosure regime, while the Trump administration has abandoned plans for U.S. climate-reporting rules.

Our earlier report on the Philippines’ COMPASS Portal explained how the government is institutionalizing a centralized online system for real-time budget, procurement, and spending disclosures across agencies and state-owned entities. The article outlined the new oversight structure and compliance requirements—backed by potential administrative sanctions—aimed at strengthening transparency and curbing fiscal leakages.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.