FCA Climate Reporting Review: Key Findings for Pension Scheme Trustees and Simplifying the Framework Ahead

On 6 August 2025, the Financial Conduct Authority (FCA) published its findings from a multi-firm review of climate reporting by asset managers, life insurers and FCA-regulated pension providers. These firms are subject to the mandatory climate-related disclosure rules (introduced by the FCA Policy Statement PS21/24).  The rules require annual disclosures aligned with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations, at both entity and product levels. 

Key Findings from the FCA’s Climate Reporting Review

Overall, the FCA found the climate disclosure rules are achieving their core purpose.  Firms are paying more attention to climate-related risks and integrating them into governance and strategy and the rules have improved transparency on how firms manage these risks on behalf of clients.  This reflects the intent of PS21/24’s TCFD-aligned requirements to embed climate risk consideration in decision-making and inform investors.

However, the review also identified several challenges in firms’ reporting practices.  One major issue was data and methodology limitations.  Many firms struggled to obtain complete, high-quality data and to develop consistent methodologies for measuring climate impacts, particularly for forward-looking analysis like scenario-modelling.  Only around half of the product-level reports reviewed by the FCA included the required analysis of all three climate scenarios, which reduced comparability between reports.

Another finding was that disclosures may be too complex for some audiences.  Firms observed that while detailed TCFD reports are useful for institutional investors, they tend to be overly technical for retail investors.  As a result, retail client engagement with these climate reports has been very limited.

The FCA noted accessibility issues: entity-level reports were usually easy to find on firms’ websites, but product-level disclosures were often hard to locate, potentially contributing to the low usage by retail investors.

The regulatory burden was also mentioned.  Asset managers (and other firms) pointed out they must comply with multiple sustainability disclosure regimes across jurisdictions and some felt the FCA’s TCFD rules were too granular or burdensome in places.  Industry feedback urged the FCA to develop a more streamlined, proportionate approach and to clarify the future of these climate disclosure rules.

What’s next?

In light of these findings, the FCA has signalled its intent to streamline and enhance its sustainability reporting framework to reduce burdens while aligning with new global standards and maintaining useful disclosures. 

The regulator’s next steps focus on making climate disclosures simpler and less burdensome for firms, without losing effectiveness.  In particular, the FCA plans to simplify disclosure requirements and ease unnecessary compliance burdens on firms while maintaining good outcomes for clients and consumers by ensuring the disclosures remain useful and help prevent greenwashing.

Another priority is to promote international alignment, building on the work to adopt ISSB standards and to incorporate climate transition plan disclosures.  These moves are aimed at keeping the UK’s regime in step with global best practices and preserving the UK’s role as a leader in sustainable finance.

The FCA has updated its guidance to clarify how firms in scope of both its TCFD rules and the forthcoming Sustainability Disclosure Requirements (SDR) can combine and align their reporting from 2026 onwards.  This should help firms avoid duplicate reporting as the new SDR regime comes into effect.  The FCA also stated it will continue to work closely with the government and engage with industry stakeholders to guide the development of a new, more streamlined disclosure regime.  We can expect a consultation process on these changes (including how and when to transition from TCFD to ISSB-aligned disclosures) in the near future.

The FCA’s review shows the regime has driven meaningful progress in how financial firms address climate risks and inform investors.  The planned simplifications and updates aim to address the practical challenges identified – making climate reports more accessible, comparable and efficient – without diluting the quality of information available to investors. 

This article was written by Alex Bones, trainee solicitor, and Heather Musk, Associate in our Pensions and Lifetime Savings Team.