UK regulator drops tougher climate-reporting plans after business concerns
EWU•The Financial Conduct Authority dropped plans to require listed companies to adopt a new UK climate-reporting standard, retaining a “comply or explain” approach after firms raised concerns about costs and competitiveness. The FCA said 92% of FTSE 350 companies disclosed climate risks in their 2025 annual reports.
1. FCA retains existing approach
The Financial Conduct Authority will retain its “comply or explain” approach to climate reporting for listed companies instead of requiring them to adopt a new UK climate-reporting standard. Under the approach, companies can choose not to disclose climate information if they explain why.
2. Companies raised concerns
Companies cited compliance costs and the impact on the UK’s competitiveness as a listing venue. UK Finance’s Ian Bhullar said the change could reduce reporting burdens but also the information available to lenders and investors assessing sustainability risks and strategies.
3. Most FTSE 350 firms disclosed
The FCA said 92% of FTSE 350 companies chose to disclose climate risks in their 2025 annual reports. Carmen Nuzzo of the TPI Global Climate Transition Centre said it remained to be seen whether voluntary compliance would hold up and whether climate-risk data would become harder to compare and assess.
