UK FCA drops mandatory climate disclosure plans for listed companies
Final rules keep the UK's 'comply or explain' approach after firms raised concerns about costs and competitiveness.
Britain's Financial Conduct Authority has dropped plans to require listed companies to disclose climate risks to investors, after firms raised concerns about implementation costs and competitiveness. The regulator had proposed in January that listed companies meet a new UK climate standard covering financially material climate-related risks and opportunities, climate targets and the potential impact of climate change on their business. Instead, the final rules published on Wednesday keep the "comply or explain" approach, the FCA said.
Feedback to the proposal said mandating UK SRS S2, the UK-endorsed version of the International Sustainability Standards Board's climate standard, may not be proportionate and could hurt the international competitiveness of companies operating in the UK, the FCA said. The move follows steps by the European Union to water down its flagship corporate climate disclosure regime and after the climate-sceptic Trump administration in the United States ditched plans for any rules in the world's biggest economy.
The FCA first introduced 30 The FCA introduced rules in 2020 requiring premium-listed companies to disclose climate-related risks to investors under the global Task Force on Climate-related Financial Disclosures (TCFD) framework, or explain why they had not done so. The rules were later extended to other categories of listed issuer. In its review of FTSE 350 companies' 2025 annual reports, the regulator found that 92% complied with the TCFD.